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LONDON (Alliance News) - UK stocks are set to rebound from the previous session's losses Wednesday with investors watching developments in the Greek situation and the special UK Budget report, ahead of the release of US Federal Reserve minutes after the market close.
But talk will be all about Barclays. Chief Executive Antony Jenkins is leaving the banking group, with John McFarlane, the newly appointed chairman, to act in an executive capacity until a successor is found. According to the statement, the board decided that Jenkins had to go.
"Whilst it is unfortunate that I have had little time to work with Antony, I respect and endorse the position of the board in deciding that a change in leadership is required at this time," McFarlane said in a statement.
The UK Budget to be outlined by Chancellor George Osborne is set to include a pledge to re-examine the banking levy, a crackdown on non-domiciles, and a relaxation of Sunday trading hours, along with controversial plans to slash around GBP12 billion from the UK's welfare budget and a populist move to raise the inheritance tax threshold.
Osborne is understood to have rebuffed calls from senior Conservatives to cut the top rate of income tax in the UK to 40% from 45%, the Financial Times reports.
IG says futures indicate the FTSE 100 to open higher at 6,449.7. The index ended down down 1.6% at 6,432.21 on Tuesday, its lowest level since mid-January, after Greek representatives failed to make a new proposal to the emergency Eurogroup meeting and resource stocks fell after a drop in commodity prices.
Eurozone leaders late Tuesday gave Greece five more days to reach an agreement that could save Athens from bankruptcy, amid warnings that failure to strike a deal by then could lead to the country's exit from the currency bloc. Greek Prime Minister Alexis Tsipras met in Brussels with his 18 eurozone counterparts for an emergency summit, after a referendum in which Greeks rejected reform measures proposed by the country's creditors.
"We have only five days left to find the ultimate agreement," said EU President Donald Tusk. "Tonight I have to say it loud and clear that the final deadline ends this week."
The leaders agreed to hold a special summit with all 28 EU member states on Sunday to reach agreement based on reform proposals that Greece has been told to submit in the coming days. In addition, Tsipras will address European parliament on Wednesday.
Wall Street reversed a lower open on Tuesday to end higher. The DJIA ended up 0.5%, the S&P 500 closed up 0.6% and the Nasdaq Composite ended up 0.1%.
In Asia Wednesday, the Nikkei in Tokyo closed down 3.1%, the Hang Seng trades down 5.1% and the Shanghai Composite is down 6.3%. New measures by the Chinese central bank have so far failed to arrest the recent decline in Chinese stock prices.
"Chinese stock markets have also endured a turbulent time in recent days, despite attempts from Chinese authorities to add liquidity to avert the slide. The extent of the volatility has seen well over 40% of stocks on the indexes suspended, with the prospect of more to come. This rout in Chinese markets appears to have spilled over into commodity markets with copper, iron ore and oil prices all coming under heavy pressure," says Michael Hewson, chief market analyst at CMC Markets.
FTSE 100-listed brewer SABMiller said it has appointed Domenic de Lorenzo as its permanent chief financial officer and an executive director, with effect from the conclusion of its annual general meeting on July 23. De Lorenzo is currently the director of group strategy and corporate development and a member of the SABMiller executive committee. He has been interim chief financial officer since February.
Rio Tinto said it is in the process of preparing its first shipments of metal from its Kitimate aluminium smelter in Canada following modernisation work carried out on the facility. The FTSE 100-listed miner said the modernisation work on the smelter will increase its production capacity by 48% and will result in it becoming one of the lowest-cost smelters in the world.
Elsewhere in the UK corporate calendar, there were full-year results from software company Micro Focus International and property company Daejan Holdings. Housebuilder Galliford Try issued a trading update, as did food wholesaler Booker Group and student accommodation developer and manager Unite Group. Great Portland Estates released a first quarter trading statement.
In the economic calendar, the UK Budget report is at 1230 BST and US EIA Crude Oil stocks are at 1530 BST. After the close of European equity markets, the US Federal Reserve will release its minutes from its latest policy meeting at 1900 BST.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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