London pre-open: Stocks seen a little lower as eyes remain on Fed

London stocks were set for a slightly weaker open on Monday as investors pause for breath following gains in the previous week and continue to mull over the chances of a rate hike by the Federal Reserve.

The FTSE 100 was expected to open down 12 points at 7,262.

Oanda’s Craig Erlam said: “For the last week or two, it’s very much the Fed that’s been front and centre, as policy makers queued up to warn that a rate hike is coming. We heard from four more policy makers on Friday including Chair Yellen and vice Chair Fischer, both of whom stayed on message with Yellen being unusually explicit in claiming that a rate hike will likely be appropriate at the next meeting if the central bank determines the data is moving in line with expectations before stating that the employment goal is essential met and inflation moving closer to target.”

Investors will also be digesting news over the weekend that China is now targeting growth of 6.5% this year, down a touch from last years’ growth rate of 6.7% and from the government’s target growth range of 6.5% to 7% in 2016.

In corporate news, Standard Life and Aberdeen Asset Management have agreed terms for an £11bn merger, having revealed talks over the weekend.

The deal will see Aberdeen shareholders own roughly a third of the enlarged company and Standard Life's the rest, though the two companies will initially have an equal number of seats on the board.

Budget airline easyJet reported an 8.2% rise in passenger numbers in February.

Passenger numbers last month grew to 5.33m from 4.93m in February 2016, as the load factor – which gauges how full the planes actually are – rose 1.6 percentage points to 92%.

BT Group said on Monday it would pay £1.18bn for the rights to broadcast all UEFA Champions League and Europa League football.

The company said the deal had secured the exclusive rights to all live games, highlights and in-match clips of both competitions.

It added that it would enhance coverage via social media coverage by making clips, weekly highlights, UEFA's magazine show, and both finals available for free on social media.

Strong cash generation and order intake helped Ultra Electronics drive full-year bottom-line growth despite delays to a small number of export contracts. The defence electronics specialist saw full-year 2016 top-line growth of 8.2% to £785.58m, while underlying profits before tax increased 6.9% to £120.1m.

Net debt as a proportion of earnings before interest, depreciation, taxes and amortisation was reduced to 1.76 times, alongside an improvement in operating margins to 16.7%. On an IFRS basis, profits jumped 94.3% to £67.6m. The company forecast a return to growth for the global defence market, amid increased spending from the US government and amid heightened global tensions. The total 2016 dividend payout was hiked by 3.7% to 47.8p.