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LONDON (Alliance News) - London share prices are set to open lower Tuesday, focused in the debt negotiations between Greece and its European creditors, while Chinese inflation data showed an acceleration, but producer prices in the country fell the most since 2009.
Also sure to grab early attention Tuesday, life insurer Prudential reported a big increase in profit for 2014, helped by growth in its key Asian markets, the UK and the US, but the results were overshadowed by news that Chief Executive Tidjane Thiam will leave to become the new CEO of Swiss bank Credit Suisse AG. Credit Suisse confirmed media reports that its current Chief Executive Brady Dougan is to step down and will be replaced by Thiam in June.
However, his replacement is yet to be confirmed, despite reports that Mike Wells, an executive director and the CEO of its Jackson National Life Insurance Company, is to succeed him at the helm.
"We are fortunate to have a very strong management team across the group and we have identified a successor and expect to be able to announce a new CEO once the regulatory approval process has been completed," Paul Manduca, chairman, said in a statement.
Prudential reported a net profit of GBP2.22 billion for 2014, up from 1.35 billion in 2013, while its closely-watched operating profit rose 14% at constant exchange rates to GBP3.19 billion. Prudential raised its full-year dividend by 10% To 36.93 pence a share.
"Europe looks poised for another weaker start on Tuesday, as a lack of economic data and no progress on the Greek bailout deal offers no new bullish sentiment to investors," says Oanda analyst Craig Erlam.
Eurozone finance ministers urged Greece to speed up reforms to successfully conclude the review and reinforced that there will be no rolling-back on measures previously agreed. Eurogroup Chairman Jeroen Dijsselbloem said Monday, "We agreed today that there is no further time to lose." Greece will resume talks with lenders in Brussels on Wednesday.
"The discussions between the Greek authorities and the institutions must and will start as from Wednesday," said Dijsselbloem. "Athens will receive remaining bailout funds of around EUR 7 billion only if it delivers agreed reforms," Dijsselbloem added.
IG futures indicate the FTSE 100 to open 18 points lower at 6,858. The index closed down 0.5% at 6,876,47, as the Eurogroup meeting on Greek debt was still underway at the London close, while the market pondered a potential summer rate hike by the US Federal Reserve following Friday's strong US jobs report.
China's inflation accelerated by more than expected from a five-year low in February but producer prices declined the most since late 2009 underscoring the persistent risk of deflation.
Inflation rose to 1.4% in February from 0.8% in the prior month, data published by the National Bureau of Statistics showed Tuesday. It was forecast to increase moderately to 1%. Month-on-month, inflation accelerated to 1.2% from 0.3% in January.
In a separate statement, the NBS said Chinese producer prices declined for the 36th consecutive month in February weighing heavily on profit margins of companies.
Industrial producer prices were down 4.8% from last year, which was bigger than a 4.3% fall seen a month ago. Economists had forecast prices to fall again by 4.3%. This was the biggest fall since October 2009. On a monthly basis, producer prices slid 0.7% after declining 1.1% in January.
Commenting on the Chinese inflation data, Erlam says: "It wasn?t great news". Erlam says the consumer prices reading was likely influenced by the Chinese Lunar New Year, so "it's worth taking the average of the first two or three months rather than February's number alone. This will give a better idea of how the economy is truly performing and unfortunately, it?s unlikely to back up what some of last month?s data is suggesting."
In Asia on Tuesday, the Japanese Nikkei 225 closed down 0.7%, and the Hang Seng trades down 0.7%. The Shanghai Composite is trading down 0.5%.
Wall Street ended higher Monday. The DJIA closed up 0.8%, the S&P 500 ended up 0.4% and the Nasdaq Composite was up 0.3%.
Brent crude is quoted at around USD58.16 a barrel Tuesday, and US benchmark West Texas Intermediate is quoted at USD49.88 a barrel. Gold is quoted early Tuesday at USD1,160.78 an ounce.
In London, WPP said it has agreed to buy a minority stake in FlowNetwork, a new Swedish over-the-top television service that delivers its programmes via the internet and also supplies Sweden's regional newspapers with content. The media buying giant didn't give any financial details about the deal.
Also in the UK corporate calendar Tuesday, G4S, Esure Group, Cairn Energy, Inchcape, John Menzies, Hill & Smith Holdings and Bango published full-year results. Close Brothers, St Ives and Craneware reported half year results, while Ocado Group issued a first-quarter trading statement.
In the economic calendar, industrial output figures from France and Italy are at 0745 GMT and 0900 GMT, respectively. Bank of England Governor Mark Carney will give a speech scheduled for 1435 GMT. In the US, the Redbook index index is at 1255 GMT, while JOLTS Job openings and wholesale inventories are at 1400 GMT.
By Daniel Ruiz; danielruiz@alliancenews.com
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