The FTSE 100 <.FTSE> index was seen opening up around 40 points, or 0.7 percent, on Friday, according to financial bookmakers, rallying in tandem with gains on Wall Street and in Asia, encouraged by a lack of any further bad news on the euro zone debt crisis.

Italy, the latest euro zone nation to come under pressure in the bond market, moved closer to a national unity government on Thursday, while its treasury managed to sell one-year bills at a yield below 7 percent -- the threshold investors believe renders its debt burden unsustainable.

Italy's Senate was set to vote on Friday for austerity measures demanded by the European Union to ease tensions surrounding the country's debt pile.

Meanwhile, Greece's prime minister designate, Lucas Papademos will name a new crisis cabinet on Friday to roll out painful austerity measures and calm the political turmoil that has threatened to bankrupt Athens and force it out of the euro zone.

Markets are still going to be taking much direction from the European debt saga, but the pace of change does seem to have genuinely reached a turning point, said Peter Stanhope, Institutional trader at IG Markets.

Britain's blue-chip stock index closed down 15.56 points, or 0.3 percent, on Thursday at 5,444.82 led lower by falls in riskier assets such as commodity and banking stocks.

But U.S. blue chips <.DJI> gained 1.0 percent on Thursday as investors latched onto positive corporate and economic news, in the absence of a clear worsening in Europe's debt crisis.

And Asian equities pushed higher on Friday, with MSCI's broadest index of Asia Pacific shares outside Japan <.MIAPJ0000PUS> up around 1.2 percent, clawing back some of the losses from a sharp sell-off in the previous session.

On the economic front, British wholesale inflation numbers for October will be released at 9:30 a.m., with PPI input prices seen down 0.1 percent on the month, and PPI output prices seen up 0.2 percent.

Across the Atlantic, November's preliminary Reuters/University of Michigan consumer sentiment index will be released at 2:55 p.m., with a reading of 61.5 forecast, up from 60.9 in October.

The U.S. bond market and government offices will be closed on Friday for Veteran's Day, although the U.S. stock market will remain open.

UK stocks to watch on Friday are:

ROLLS-ROYCE

The defence contractor issues a trading update.

BHP BILLITON , RIO TINTO

Rio Tinto and BHP Billiton, the world's No.2 and 3 iron ore miners, sealed an agreement to pay Western Australia state a higher royalty on iron ore fines to match the royalty on lump ore, as agreed in May.

HSBC HOLDINGS

HSBC is laying off several hundred investment bankers in London, Hong Kong and elsewhere this week as part of its jobs cull to save billions of dollars, people familiar with the matter said.

BP

A Siberian court has rejected a $2.8 billion lawsuit filed by minority shareholders in Russia's No.3 oil firm TNK-BP TNBP.MM against board members nominated by the firm's British shareholder BP a BP lawyer said on Friday.

ROYAL DUTCH SHELL

Oil majors Royal Dutch Shell and Total have slashed Syrian oil production as international sanctions make exports impossible, industry sources told Reuters.

DE LA RUE

The bank note printer, was chased higher on Thursday on talk that French suitor Oberthur will soon return with a knockout cash bid worth 953 million pounds or 1,000 pence a share, according to the Daily Mail's Market report.

SPECTRIS

The engineer issues a trading update.

HORNBY

The model railways and Scalextric cars firm reports first-half results.

CARRS MILLING INDUSTRIES

The food producer posts full-year results.

T CLARKE

The group issues a trading update.

GALLIFORD TRY

The housebuilder holds its annual general meeting.

(Reporting by Jon Hopkins; Editing by Dan Lalor)