London pre-open: Stocks seen lower as investors eye Fed speakers

London stocks were set for a weaker open on Friday as investors eyed speeches from several Federal Reserve officials, including Chair Janet Yellen.

The FTSE 100 was expected to open 21 points lower than Thursday’s close at 7,361.

There are no UK data releases of note due on Friday.

As far as the Fed speakers are concerned, Chicago Fed President Charles Evans and Richmond Fed President Jeffrey Lacker are both due to give speeches at 1515 GMT, while board member Jerome Powell will speak at 1615 GMT.

Vice Chair Stanley Fischer will deliver a speech at 1700 GMT and Fed Chair Janet Yellen is due to speak at 1800 GMT.

CMC Markets’ Michael Hewson said: “This week we’ve heard normally dovish members of the Federal Reserve in Lael Brainard and William Dudley of the New York Federal Reserve state that the time was coming closer to the time for another rise in interest rates.

“This has sent the market probability for a Fed rate rise this month to 90%, a staggering rise from 36% just over a week ago and to a level where the Fed is more or less expected to act.

“This move in expectations hasn’t happened by accident so Janet Yellen’s speech later today in Chicago about the US economic outlook would be a major surprise if she were to push back against her colleague’s comments from earlier this week. It would also be enormously counterproductive in terms of how the market perceives any future market guidance this year.2

Investors will also be digesting data out of China, which showed activity in the services sector expanded at the slowest pace in four months last month.

The services PMI slipped to 52.6 in February on a seasonally adjusted basis from 53.1 the month before, the Markit/Caixin services purchasing managers' index showed. This marked the slowest rate of expansion since October.

Meanwhile, Caixin's composite PMI for the manufacturing and services sectors increased to 52.6 from 52.2 on the back of growth in the manufacturing sector.

On the corporate front, the weak pound and acquisitions helped advertising giant WPP lift reported full year pre-tax profits by 26% to £1.8bn.

Billings were up 16% to £55.2bn and revenues 17.6% to £14.3bn.

WPP said all its trading regions reported like-for-like revenue growth, led by Western Continental Europe, Asia Pacific, Latin America, Africa & the Middle East and Central & Eastern Europe.

London Stock Exchange Group tried to ignore the merger-shaped elephant in the room as it reported strong sales and profits growth and hiked its dividend 20% to reassure investors of its confident outlook.

Despite last month admitting it was pretty sure the proposed merger with Deutsche Börse would be blocked by regulators due to competition concerns, the company said it "continues to work hard" on the deal ahead of the conclusion of the European Commission investigation due on 3 April.

AstraZeneca has partnered with French pharmaceutical Sanofi to develop and commercialise a respiratory syncytial virus antibody.

The FTSE 100 company's biologics research and development arm MedImmune and Sanofi Pasteur, the vaccines division of Sanofi, have agreed to develop and commercialise MEDI8897, a monoclonal antibody for the prevention of lower respiratory tract illness caused by respiratory syncytial virus, the most prevalent cause of the illness among young children.

Electra Private Equity’s portfolio manager Epiris announced on Friday that its portfolio company AXIO Group had agreed to sell RISI, the information provider for the global forest products industry, to Euromoney Institutional Investor for $125m.

Based on current exchange rates, Electra would receive proceeds from AXIO of £66m - an uplift of £21m or 46% and equivalent to an increase in its net asset value of 45p per share on the valuation of Electra's investment at 30 September 2016.