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LONDON (Alliance News) - London share prices are higher Friday mid-morning, forging ahead despite the Greek debt talks at Thursday's Eurogroup meeting finding no agreement, with Hikma Pharmaceuticals and Colt Group leading the FTSE 100 and FTSE 250 gainers, respectively.
The blue-chip index is up 0.5% at 6,746.03, while the mid-cap index is up 0.3% at 17,735.47. Meanwhile, the AIM All-Share is up 0.3% at 765.98.
In Europe, major indices also are higher, with the CAC 40 in Paris up 0.7% and the DAX 30 in Frankfurt up 0.7%, following Thursday's rally.
The euro weakened against the other major currencies amid concerns that Greece is edging closer to a debt default and as German producer price index declined by more than expected in May.
The meeting of eurozone finance ministers on Thursday ended with no deal for Greece and the prospect of Grexit continue. As a result, eurozone leaders will hold an emergency summit on Monday to discuss the situation in Greece.
"With over EUR2 billion of capital flight out of Greek back this week, there are questions now over whether the banks will be able to open up on Monday morning," says Hantec Markets analyst Richard Perry. "There is talk of potential capital controls and the European Central Bank will have to make another decision on the European Lending Authority headroom once again."
Greece is seeking to access EUR7.2 billion remaining in its international bailout, but has been struggling for months to agree with its creditors on prerequisite economic reforms. Time is running short as the European part of the country's bailout is due to expire at the end of this month.
An extension now has to be discussed, since it is "simply impossible" to complete the procedures needed for the disbursement of the bailout funds by June 30, said Eurogroup President Jeroen Dijsselbloem, after the eurozone finance ministers meeting.
Germany's producer prices declined by more than expected in May, data released by Destatis revealed Friday. Producer prices declined 1.3% in May from last year, but this was slower than the 1.5% drop seen in April and 1.7% fall in March. The annual pace of decline was bigger than a 1.1% fall forecast by economists though.
The euro fell back after the release of the German producer prices data, and currently trades at USD1.1310.
Outside the eurozone, UK public sector borrowing declined in May from the last year, the Office for National Statistics reported Friday. Public sector net borrowing excluding interventions was GBP10.1 billion or 0.5% of GDP in May. This was a decrease of GBP2.2 billion from May 2014. It was expected to drop to GBP10.3 billion.
This decrease in net borrowing was largely due to a decrease of GBP1.6 billion in central government net borrowing, combined with a decrease of GBP600 million in local government net borrowing. At the end of May, public sector net debt excluding public sector banks totalled GBP1.5 trillion or 80.8% of GDP, an increase of GBP83.2 billion compared with last year, the ONS said.
On the London Stock Exchange, Hikma Pharmaceuticals is leading FTSE 100 gainers, up 3.8%, after being upgraded by Citigroup to Buy from Neutral. Meanwhile, Ashtead Group is up 1.8% after Exane BNP upgraded the industrial equipment rental company to Outperform from Neutral.
London Stock Exchange Group is up 1.2% after it named Donald Brydon, the current chairman of Royal Mail and formerly of the London Metal Exchange, to take on the same role at the bourse. The group has been looking for a successor to Chris Gibson-Smith since last July, when he said he would be leaving the LSE. Gibson-Smith will step down on July 1, but will be available to advise the board until the end of August.
Mining stocks are amongst the worst performers after rising Thursday as commodity prices increased, with Randgold Resources down 0.7%, Fresnillo down 0.7%, Glencore down 0.5% and Anglo American down 0.4% on Friday.
In the FTSE 250, Colt Group is by far the best performer with its shares surging 21% at 189.71 pence after Fidelity made an 190p per share offer for the remaining shares in technology firm it does not already own, valuing Colt at around GBP1.72 billion. FMR and FIL, together known as Fidelity, said this offer price will not be increased. FMR already has a 62.43% shareholding in Colt.
However, the independent directors Colt said the offer "undervalues" the company, and made no recommendation as to whether or not shareholders should accept the offer. The offer price is at a 21% premium to Colt's closing price of 157 pence Thursday.
Poundland Group, up 4.5%, is recovering Thursday's losses after Morgan Stanley upgraded the discount retailer to Equal-Weight from Underweight.
Meanwhile, N Brown is up 2.1% after it reported growth in revenue in the first quarter of its financial year and said its guidance for the full year remains unchanged. The online, catalogue and stores retailer said group revenue was up 2.5% in the 13 weeks to May 29, as like-for-like sales rose 1.5% and product revenue grew 4.3% but financial services revenue fell 1.9%.
Card Factory is the worst performer in the mid-cap index, down 8.6%. The greeting card retailer said some of its directors and members of its senior management team have sold 14.8 million shares in the company at 330 pence each, representing approximately 4.3% of its issued share capital.
At that price, the sale was worth GBP48.8 million.
By Daniel Ruiz; danielruiz@alliancenews.com
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