London pre-open: Stocks to start higher after Fed's Yellen

Stocks will start the day higher after Fed chair Janet Yellen indicated overnight the US central bank was keeping all options on the table as regards a first hike in interest rates this year.

"Most of my colleagues and I anticipate that it will likely be appropriate to raise the target range for the federal funds rate sometime this year," Yellen told her audience at Amherst college in Massachusetts.

The Footsie was expected to start the session 69 points higher from Thursday’s close of 5,961.49.

As of 07:22 the Shanghai Stock Exchange’s Composite Index was down by 1.31% or 41.2 points to 3,101.48.

“If the Federal Reserve decides to raise interest rates in the coming months it will be doing so at a time when inflation expectations are at a six year low, and when, apart from the Swiss franc, it is the best performing currency this year.

“It will also be doing so at a time when a good number of manufacturing indicators in the US economy are starting to flash warning signals. This month alone, the Empire, Philadelphia, Richmond and Kansas City Fed manufacturing indexes have returned negative readings,” said CMC UK’s chief market analyst Michael Hewson.

Also overnight, Monetary Policy Committee member Ian McCafferty wrote in The Times that concerns over China and emerging markets “should not be overstated” when set against improvements in Britain’s main trading partners, the Eurozone and the US.

Just Retirement and Partnership Assurance to sell shares

Pension providers Just Retirement and Partnership Assurance are to raise £150m in a share placing to help pay for their planned merger. The cash will cover combined non-recurring integration and transaction costs of around £80m, the two companies said on Friday.

Fuller, Smith & Turner and Young's have lodged offers to buy Cubitt House, according to Sky News. Cubitt House’s stable of bars includes some of best-known pubs - The Thomas Cubitt, The Orange, The Alfred Tennyson, and The Grazing Goat. A source close to the process told Sky News on Thursday that both restaurant and pub operators have lodged bids, but there could also be other bidders for Cubitt. The value and the timing of the bids are unclear but the process is being run by advisory firm Sapient Corporate Finance.

Roy Franklin has been appointed to the board of Amec Foster Wheeler. The consultancy, engineering and project management company made the announcement on Friday. Franklin is currently chairman of Keller Group and Cuadrilla Resources Holdings, deputy chairman of Statoil ASA and is a non-executive director of Santos Ltd.