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LONDON (Alliance News) - London shares are higher Thursday mid-morning, as indices across Europe cheer the Greek parliament approval for the new debt bailout programme for Greece, while focus remains on the European Central Bank rate decision due at 1245 BST.
The FTSE 100 is up 0.5% at 6,785.47 points, the FTSE 250 is up 0.6% at 17,733.35 and the AIM All-Share is up 0.2% at 757.53.
In Europe, the CAC 40 in Paris is up 1.5% and the DAX 30 is up 1.4%.
Stocks across Europe are in the green after the Greek Parliament's overnight decision to back tough economic reforms may clear the way for the ECB on Thursday to boost emergency funding to the nation's embattled banks.
The ECB meeting comes just hours after Greek Prime Minister Alexis Tsipras rammed a set of tax and pension reforms aimed at securing the country's third bailout in five years through the legislature in Athens. Greek lawmakers approved the tough austerity measures required by the EU to enable Athens access a badly needed bailout package worth EUR86 billion. Nevertheless, the approval was not without some stiff opposition from key members of Tsipras's Syriza party as former Finance Minister Yanis Varoufakis or current Energy Minister Panagiotis Lafazanis.
Greek banks have been kept afloat for months by funds provided to the nation's central bank under the ECB's Emergency Liquidity Assistance scheme.
After leaving the ELA for Greece unchaged once again this week, at EUR89 billion, ECB President Mario Draghi could announce at his Thursday press conference, due at 1330 BST, that the central bank has raised the emergency financial support levels for Athens. This could help ease the pressure on cash-strapped Greece's financial system, so as to allow the nation's banks to reopen after they were closed two and half weeks ago amid government-imposed capital controls.
Berenberg analyst Holger Schmieding believes the ECB is likely to raise the cap for ELA for the Greek banks somewhat today, preparing the ground for an eventual reopening of Greek banks perhaps some time next week.
"If Greece adopts the second batch of bailout conditions on July 22, if all eurozone members approve the envisaged bailout talks with Greece and if Europe puts together the bridge loan for Greece to pay International Monetary Fund arrears and the EUR3.5 billion due to the ECB on July 20, more ELAs could follow," writes the analyst. "However, some capital controls will likely stay in Greece for a few months."
Lloyds Bank says in a report that Draghi may hint that asset purchases under the Quantitative Easing programme could be extended beyond the expected end date of September 2016 or even stepped up should economic or financial market conditions require it.
After meeting the ECB's Draghi, US Treasury Secretary Jack Lew has been in talks with German Finance Minister Wolfang Schaeuble in Berlin. Lew is now due to travel to Paris to meet French Finance Minister Michel Sapin before returning to Washington.
Eurozone inflation slowed as estimated in June largely due to a fall in energy prices, final data from Eurostat showed Thursday. Inflation eased to 0.2% in June from 0.3% in May. It came in line with the flash estimate released on June 30. Eurozone's inflation is well below the ECB's targets of below, but close to, 2% over the medium term.
In London, UK media and communications regulator Ofcom on Thursday said it has completed the first phase of its Strategic Review of Digital Communications and said it will seek views on a number of potential changes, including on the possible break-up of BT Group.
Ofcom outlined a range of potential options to improve competition in the communications market and will seek views and evidence on a series of future regulatory approaches as regards BT.
These would include retaining the current model, where BT's Openreach infrastructure business is required to provide access to the network to competing providers, or strengthening the current regulatory model, which would impose new rules on BT, including controls on its wholesale charges with stronger incentives to improve quality of services and tougher penalties should it fail to meet targets.
The option also includes separating the Openreach business from BT, something rival Sky recently called for. Ofcom said this could deliver competition and wider benefits for consumers and would "remove BT's underlying incentive to discriminate against competitors". It added, however, that the "process would be challenging and it may not address some concerns relating to Openreach".
BT is down 0.4% Thursday mid-morning, while its competitors shares are rising, with Sky up 0.7% and TalkTalk Telecom Group up 0.8%.
Meanwhile, Wolseley is up 1.5% at 4,369p after JP Morgan added the building products company to its 'Analyst Focus List', upgrading it to Overweight from Neutral and lifting its price target to 4,800p from 4,100p. Berenberg resumed the coverage of drugmaker Shire with a Buy recommendation, lifting the company's shares by 1.5%.
Sports Direct International is down 0.8% after the sporting goods retailer on Thursday reported growth in profit in its recently ended financial year, boosted by a rise in revenue as it extends its portfolio across the UK and Europe. The company reported a 31% rise in pretax profit in the year ended April 26 to GBP313.4 million from GBP239.5 million the year before, as revenue grew 4.7% to GBP2.8 billion from GBP2.7 billion. It said revenue and profit growth was driven by continued expansion in the UK and across Europe.
In the FTSE 250, Mitchells & Butlers is down 2.7% after Deutsche Bank downgraded the company to Hold from Buy.
Still in the economic calendar, in the US, initial and continuing jobless claims are due at 1330 BST, while the Philadelphia Federal Reserve Manufacturing Survey and the NAHB housing market index are expected at 1500 BST.
By Daniel Ruiz; danielruiz@alliancenews.com
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