London pre-open: FTSE to open higher as hopes build for US resolution

10th Oct 2013 07:24

City sources predict the FTSE 100 will open around 26 points higher than Wednesday's close of 6,337.91, tracking Japanese stocks higher as they hit their highest levels in a week on improved sentiment. There have also been encouraging signs from the US, with one Republican aide reportedly indicating that the party may potentially agree to a short-term increase in government borrowing, extending the time available for negotiation for a longer-term plan. US stock markets finished mixed last night, encouraged by the news well-known dove Janet Yellen has been nominated as the next chair of the US Federal Reserve. Yellen will be the first female at the head of the US central bank and is widely expected to argue for a continuation of aggressive monetary easing started by her predecessor, Ben Bernanke, when he steps down on January 31st 2014.Craig Erlam, Market Analyst at Alpari said that investors should "respond positively" to the news, "especially given that he was previously believed to be more in favour of a much more hawkish Lawrence Summers". Back in the UK, the Bank of England (BoE) is today expected to keep its monetary policy unchanged when it meets on Thursday. The Bank's Monetary Policy Committee is likely to hold interest rates at 0.5%.The central bank has vowed to maintain the rate at its record low until the unemployment rate falls from its current level of 7.7% to 7%. During its meeting, the BoE is also expected to keep its asset purchase programme at £375bn. In other news, Post Office shares are reportedly set to be priced at 330p - the top end of expectations - valuing the business at £3.3bn, according to the BBC. Meanwhile, Santander is set to join the government's 'Help to Buy' scheme. Household utility giant SSE has revealed that electricity and gas tariffs are to rise by an average 8.2% from November, meaning that typical dual-fuel customers will be paying an extra two pounds per week. The company said that raising prices "is the last thing [it] wants to do" and remains committed to protecting customers as much as possible from increasing costs. It has therefore pledged not to raise prices again before autumn 2014 at the earliest "and is urging any customer worried about how the changes will impact them to get in touch to discuss what help is available to them".In other company news, GKN has announced that William Seeger, Group Finance Director, will step down from the role he has held since 2007 in February of next year, before retiring from the group altogether at the end of August. The company has appointed Adam Walker, the Group Finance Director of Informa, as his replacement. Newsagent WH Smith booked full-year profit ahead of expectations, lifted its final dividend 15% and announced a further £50m share buyback. Pre-tax profit rose 6% to £108m for the year ended August 31st while total sales fell 5% to £1.18bn. Like-for-like sales also fell 5%.While growing revenue has been challenging for health services outsourcing firm Synergy Health in the first half of the year, it said earnings growth remained on track. Overall, trading for the six months to September 29th was in line with board expectations at the FTSE 250 company. NR