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LONDON (Alliance News) - London stocks are set to open higher Wednesday after Greek government sources suggested the country will ask for an extension of its loan agreement with the eurozone.
IG futures indicate the FTSE 100 to open 13.7 points higher at 6,911.8. The FTSE 100 ended up 0.6% at 6,898.13 Tuesday, its highest close since December 1999, shrugging off the lack of progress seen in the Eurogroup meeting with Greece on Monday, as UK inflation fell to its lowest level on record.
Greece will ask Wednesday for an extension of its loan agreement with the eurozone, government sources said, in an apparent turnaround for Athens, which is threatened with insolvency while facing an ultimatum from its European partners.
Austerity measures demanded from Athens in return for the financial help do not apply, the government sources said Tuesday night without elaborating.
Greek media reported that Athens will seek a six-month extension of that loan programme and will promise eurozone countries not to undertake any measures that would lead to budget deficits. Athens is open to further concessions, the news reports said.
The focus will now be on the European Central Bank's decision Wednesday on Greek emergency liquidity assistance.
"While there is some concern that the ECB might suddenly turn off the taps, they are unlikely to do so, unless given the wink by politicians from Brussels," says Michael Hewson, chief market analyst at CMC Markets.
"ECB President Mario Draghi is unlikely to want to go down in history as the man who pulled the plug on Greece and undermine the 'irreversible' nature of the euro."
Wall Street closed higher Tuesday after returning from a holiday on Monday. The DJIA closed up 0.2%. The S&P 500 also ended up 0.2%, pushing to another record high close of 2,100.34. The Nasdaq Composite closed up 0.1%.
In Asia Wednesday, the Japanese Nikkei closed up 1.2% after the Bank of Japan kept its monetary policy unchanged, as expected, but lowered its inflation assessment on Wednesday after data showed earlier this week that the country exited recession.
The Hang Seng ended up 0.2% after a half-day session, while the Shanghai Composite was closed for the Chinese New Year's Eve holiday.
Coca-Cola HBC AG said its sales and volume decline improved in the fourth quarter, but still posted a drop in both for the full year. However the bottling group's pretax profit for 2014 was up on the year before on the back of lower finance costs and a one-off disposal gain.
RSA Insurance Group said it has agreed a deal to sell its minority stake in Indian insurance company Royal Sundaram Alliance Insurance to joint venture partner Sundaram Finance. Sundaram will pay GBP46 million in cash to RSA to acquire the FTSE 100-listed insurer's 26% stake in the company.
Gas and electricity generator SSE said it will work with the Competition & Markets Authority after the UK competition regulator published a report which indicated energy suppliers in the UK are charging long-term customers higher prices. The CMA found a total of 95% of dual-fuel customers on standard variable tariffs would have saved GBP158 to GBP234 per year had they switched provider between 2011 and 2014.
Galliford Try reported a rise in pretax profit for first half of its financial year on the back of higher revenue and hiked its dividend by nearly half. The FTSE 250-listed construction and housebuilding company said its pretax profit for the six months to the end of December was GBP42.5 million, up 12% from the GBP38.1 million posted a year earlier.
Balfour Beatty said it has reached financial close and completed the acquisition of the GBP352 million Gwynt y Môr offshore transmission project. The FTSE 250-listed construction and support services company said it will jointly own the project with infrastructure investor Equitix. Balfour will invest GBP28 million of equity in the project, representing 60% of the equity required.
In the economic calendar the Bank of England will release the minutes from its last policy meeting at 0930 GMT, alongside UK unemployment and wage data. There is US producer prices at 1330 GMT and industrial production at 1415 GMT as well. After the close of London equity markets, the US Federal Reserve will release its minutes from its previous policy meeting at 1900 GMT.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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