Bodycote pushes revenues higher, Grafton Group to buy Dutch ironmonger

London open

The FTSE 100 is expected to open 15 points higher on Friday, after closing up 0.67% at 6,794.71 on Thursday.

Stocks to watch

Bodycote issued a trading update for the period from 1 July to 31 October on Friday, with group revenue 12.7% higher than the same period last year and 3.1% lower at constant exchange rates, against somewhat weak comparables. Several new sites were acquired in the period with annualised sales of £14m, though the contribution to full year 2016 EPS from the new businesses will be minimal while they are integrated into the group. Revenue from ongoing operations was 13.2% higher, or 2.7% lower at constant exchange rates.

DIY company Grafton Group has agreed to by Dutch ironmonger Gunters en Meuser in order to increase its presence in Amsterdam. The deal, which is subject to approval from the Dutch competition authority, is expected to take place in January.

Engineering distribution firm Electrocomponents reported a 44% jump in first half profits to £55.1m. Revenues were up to £706m from £626m. The interim dividend is unchanged at 5p. The company said it had made an encouraging start to the second half of the year, with all hubs seeing an improvement in underlying revenue growth in October versus the Q2 trend.

Newspaper round-up

Germany’s finance minister has set out a tough line on EU divorce talks with Britain on issues from tax breaks to exit costs, dashing Downing Street hopes Berlin would soften Europe’s stance on a UK departure from the bloc. Theresa May’s government has been looking to Germany, a net exporter to the UK, to temper French demands that Britain “pay a price” for its decision to leave. – Financial Times

Shinzo Abe has declared his trust and confidence in Donald Trump as the US president-elect’s first meeting with a foreign leader passed off successfully. Emerging from Trump Tower in New York after an hour-and-a-half meeting, Japan’s prime minister hailed the new president as a man he can do business with. – Financial Times

There is “no reason” for the Big Six energy giants to raise their standard variable tariffs this winter because their hedging strategies should insulate them from rising wholesale prices, leading analysts have said. Amid mounting speculation over a possible round of price rises, consultants Cornwall Energy said their analysis showed major suppliers should be able to hold off for several months – but warned that electricity price rises of up to 10pc before winter 2017-18 were highly likely. – Telegraph

JP Morgan is to pay $264m (£212m) to US authorities to settle charges the Wall Street bank breached anti-bribery laws by employing Chinese "princelings", the children of influential figures, to secure business worth more than $100m. Regulators have spent almost three years investigating whether hiring by the American firm overseas violated US the Foreign Corrupt Practices Act (FCPA). – Telegraph

The chief executive of Tesco has fired a fresh warning shot at multinational consumer brand owners, such as Marmite’s parent company Unilever, by asking them not to push currency-related price hikes on to British shoppers. In his first comments since last month’s “Marmitegate” stand-off, Dave Lewis said consumers should not be asked to pay “inflated prices” due to fluctuations in currencies, such as the post-referendum slump in the pound. – Guardian

The chancellor, Philip Hammond, should limit the impact of the Brexit vote on the economy by excluding public investment spending from his deficit reduction plans in his autumn statement next week, economists say. As the Treasury finalised tax and spending plans, economists warned that a black hole in government finances of more than £100bn could deter the chancellor from boosting infrastructure spending and leave the economy to cope with severe headwinds without extra support. - Guardian

US close

Wall Street closed on a high note as investors largely shrugged off Fed chair chair Janet Yellen's speech which appeared to all but confirm a December rate hike was in the offing.

The Dow Jones Industrial Average edged higher by 0.19% or 35.68 points to end at 18,903.82 points, while the S&P 500 rose by 0.47% to 2,187.82 points, and the Nasdaq climbed 0.74% to 5,333.97.

Testifying before the joint economic committee on Capitol Hill, Federal Reserve chief Janet Yellen said that "at its last meeting the FOMC had judged that the case for an increase in the target range [for the Fed funds rate] had continued to strengthen and that such an increase could well become appropriate relatively soon if incoming data provide some further evidence of continued progress toward the Committee's objectives."

The Fed expects the growth of the US economy “will warrant only gradual increases in the federal funds rate over time to achieve and maintain maximum employment and price stability," she added.

Yields on the benchmark 10-year Treasury note were six basis points higher at 2.28% by the closing bell, while those on two-year notes were down by one basis point at 1.03%. At 90.6%, according to Fed funds futures the odds of a December rate hike were unchanged from the previous session.