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City sources predict the FTSE 100 will open around 10 points higher than Thursday’s close of 6,761.07.

Stocks to watch

Troubled oil and gas explorer Afren. which defaulted on a $15m interest payment on its loans earlier this month, has entered into an agreement with its lenders to address its funding needs and recapitalise its capital structure. The plan, which includes a debt-for-equity swap with creditors, will result in substantial dilution for existing shareholders, leaving them holding just 11% of the company.

Glasxosmithkline has sold half its stake in former South African associate Aspen Pharmacare for £0.57bn. Having sold 28.2m shares, at a price of 372 rand per share, GSK now holds a 6.2% stake in Aspen, South Africa’s largest drug company.

JD Wetherspoon served up a slightly short measure of first-half profits as the pubs group saw cost pressures outweigh a rise in revenues. For the 26 weeks ended 25 January sales rose 9% to £744.4m, or up 4.5% on a like-for-like basis.

Serious cracks have started to appear in the proposed 41bn merger of Holcim and Lafarge, according to the Financial Times. Both companies boards are now discussing a potential renegotiation of the terms of the deal, amid concerns that the price on the table no longer commands the support of key Holcim shareholders, the paper said.

A tentative deal has been made between the United Steelworkers Union and Shell, the company representing refinery operators, to end the biggest US refinery strike in 35 years, writes The Wall Street Journal. Thousands of union workers have staged a walkout over salaries, safety and other issues over the last six weeks.

The Times has reported that the Bank of England kept a money market probe at the Bank of England secret for three months despite the advice to go public by the Serious Fraud Office. The investigation was launched in December.

US stocks rebounded from a two day losing streak on Thursday, as the dollar retreated from a 12-year high and a number of banks were approved by the Federal Reserve to raise dividends and buy back shares.

At close, the Dow Jones Industrial Average was up 1.47% to 17,895.22, the S&P 500 climbed 1.3% to 2,065.95 and the Nasdaq Composite jumped 0.89% to 4,893.29.

Financial stocks gained banks passed the Fed’s stress tests, which assess whether lenders have sufficient reserves to endure a major economic downturn.

Citigroup rose 3% after revealing that it would buy back $7.8bn in stock and raise its quarterly dividend to 5 cents from 1 cent. Morgan Stanley gained 6% after announcing a $3.1bn stock buyback and raising its dividend to 15 cents from 10 cents.