London pre-open: Stocks seen little changed; central bank policy still in focus

London stocks were expected to open little changed on Friday as investors continue to mull over central bank policy.

The FTSE 100 was set to open four points lower than Thursday’s close at 6,726.

CMC Markets’ Michael Hewson said: “Equity markets look set to end a choppy week with no clearer idea of where to go to from here than they did at the end of last week. One thing is certain there is increasing anxiety that for all the narrative from central bankers it is increasingly obvious that it is going to be extraordinarily difficult for policymakers globally to improve economic conditions in any significantly meaningful way from where we are now without politicians help. This looks some way off and helps explain this week’s weakness in equity and bond markets.

“Having now moved beyond last week’s ECB decision to keep policy unchanged and yesterday’s similar action from the Swiss National Bank and Bank of England attention now turns to next week’s Bank of Japan and US Federal Reserve decisions where there is likely to be a similar outcome.”

There are no major UK data releases due, but in the US, the consumer price index is at 1330 BST, while University of Michigan sentiment is at 1500 BST.

In corporate news, aviation support and aftermarket services company BBA Aviation announced on Friday that, after a number of approaches and a formal review, it has reached agreement with John Menzies on the terms of the sale of commercial aviation services subsidiary ASIG for $202m cash.

The FTSE 250 firm said Menzies is funding the acquisition through raising additional debt and equity and, in addition to customary approvals, the transaction will require the approval of its shareholders.

As a result of that process, the disposal is expected to close around the end of 2016.

Veterinary product manufacturer Decra Pharmaceuticals agreed to buy the business and assets of Apex Laboratories, which sells branded animal products in Australia and New Zealand, for AUS$55m (£31.3m).

The acquisition, to be finalised on 14 October, will be funded from cash and debt resources, and is expected to be earnings enhancing in the first 12 months.

Phoenix Group has confirmed it is evaluating the possibility of acquiring Abbey Life Assurance following Bloomberg and Reuters reports on Thursday that Deutsche Bank was nearing a deal to sell its UK insurance business to Phoenix.

“As stated at the time of the interim results on 25 August 2016, Phoenix continues to explore further acquisition opportunities in the UK closed life sector. In this context, Phoenix is in advanced discussions with Deutsche Bank in relation to a possible acquisition of Abbey Life,” the FTSE 250 company said on Friday.

It added that there can be no certainty the discussions will lead to a transaction.