London pre-open: Stocks seen touch higher

London stocks were expected to open just a touch firmer on Monday, regaining some poise after the losses suffered last week amid concerns about an earlier-than-expected interest-rate hike by the Federal Reserve.

The FTSE 100 was seen starting four points higher than Friday’s close at 6,160.

“With market sensitivity to anything US interest rate-relatively now picking up, today’s speeches from three Fed officials could be important. James Bullard, John Williams and Patrick Harker are all due to speak this afternoon and if the message is consistent with those towards the end of last week and the April minutes, investors would be foolish to ignore them,” said Oanda’s Craig Erlam.

“That said, there’s one person’s view that will stand out above all others this week and that is Fed Chair Janet Yellen, whose opinion we should get this Friday. Should Yellen hint at a June or July hike then I think markets will reluctantly accept defeat.”

There are no major UK data releases due but in the US, Markit PMI manufacturing is at 1445 BST.

Legal & General has acquired a £3bn annuity portfolio from Aegon.

L&G said the transaction had been structured initially as a reinsurance contract and covers approximately 27,000 of in-payment policyholders who will remain customers of Aegon during this period. They will continue to be serviced by Aegon until the transfer is approved.

Transitional benefits will be available to offset the Solvency II risk margin. L&G said it had chosen not to reinsure the longevity risk in relation to this transaction. On a pro-forma basis, the 'Day 1' impact of this transaction decreases the Group's Solvency II surplus by around 50m and the Solvency II coverage ratio by about 3 percentage points.

Outsourcing company Mitie Group reported a marginal rise in operating profit before other items for the year on Monday, to £128.9m from £128.6m, generating a margin of 5.8% - up from 5.7%.

The FTSE 250 firm said in the year to 31 March, total operating profit grew 100.9% to £112.5m, with basic earnings per share growth of 119.6%.

During the year, its cash conversion rate was 75.2%, down from 126.%, with net debt broadly flat at £178.3m or 1.2x EBITDA.

Mitie’s board declared a 3.4% rise in the dividend to 12.1p per share.