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LONDON (Alliance News) - London share prices ended unchanged Wednesday following a report that UK jobless claims increased in June, while the Greek parliament was due to vote in the evening the approve the new bailout programme for the debt-ridden country.

The FTSE 100 closed perfectly flat at 6,753.75 points, the FTSE 250 also ended flat at 17,637.08, and the AIM All-Share finished up just 0.1% at 756.22.

In Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt closed up 0.3% and 0.2%, respectively.

The pound, which had been gaining, was sold in the morning after UK jobless claims were reported to have increased unexpectedly in June. Data from the Office for National Statistics showed the number of people claiming jobseeker's allowance increased by 7,000 in June from May, confounding expectations for a decline of 9,000. This was the first increase in jobless claims since October 2012.

During March to May, the UK jobless rate came in at 5.6%, up from 5.5% in the three months to April but lower than 6.5% seen in the same period a year earlier, the statistical office said.

On a more positive note for the UK economy, pay for employees including bonuses increased by 3.2% in three months to May and that excluding bonuses by 2.8%.

At the London equities market close, the pound was quoted at USD1.5609, down from USD1.5652 prior to Wednesday's unemployment data, though still up from USD1.5582 at the equities close on Tuesday.

The data came a day after Bank of England Governor Mark Carney said that "the point at which interest rates may begin to rise is moving closer, given the performance of the economy," suggesting that the UK central bank soon could start to normalise UK monetary policy.

In the US, Federal Reserve Chair Janet Yellen reiterated Wednesday that if the US economy evolves as the central bank expects, toward its objectives of maximum employment and 2% inflation, economic conditions would be favourable to raise US interest rates "at some point this year".

"Indeed, most participants in June projected that an increase in the federal funds target range would likely become appropriate before year-end," Yellen said in prepared remarks to Congress. "But let me emphasize again that these are projections based on the anticipated path of the economy, not statements of intent to raise rates at any particular time."

Yellen said the stance of US monetary policy will likely remain "highly accommodative for quite some time" after the first increase in US interest rates. "Of course, if the expansion proves to be more vigorous than currently anticipated and inflation moves higher than expected, then the appropriate path would likely follow a higher and steeper trajectory," the Fed Chair said.

US producer prices rose by slightly more than expected in June, according to a report released by the US Labor Department on Wednesday. Its producer price index rose by 0.4% in June following a 0.5% increase in May. Economists had expected prices to climb by 0.3%. The bigger-than-expected increase partly reflected another jump in energy prices, which rose by 2.4% in June after soaring by 5.9% in May.

At the European stock market close, Wall Street was higher, with the DJIA up 0.1%, the S&P 500 up 0.2% and the Nasdaq Composite up 0.3%.

While Carney in the UK and Yellen in the US are have been talking about raising interest rates soon, Carney's old employer, the Bank of Canada, on Wednesday did the opposite, trimming its interest rates to 0.50% from 0.75%, saying lower oil prices and weaker-than-expected exports have stalled economic growth.

In Greece, Parliament is set to vote Wednesday evening to decide whether to approve the new bailout programme agreed by the Greek prime minister and eurozone leaders on Monday. Some analysts think the results are likely to be known at 2000 BST. The measures include streamlining Greece's value-added tax system, reforming its pension system, and safeguarding the independence of the national statistics office ELSTAT.

The bill, which was presented in Parliament on Tuesday, was drawn up based on creditors' demands after a crucial eurozone summit where a preliminary agreement was reached in which the reforms were promised in exchange for the country's third bailout, worth up to EUR86 billion. The law is expected to be adopted, with the backing of pro-European opposition parties as well as the ruling SYRIZA - even though some of the ruling party's lawmakers are expected to defect.

The European Commission has proposed granting Greece a three-month loan of up to EUR7 billion to keep the country afloat through July, according to a document posted on its website. The money would come from the European Financial Stability Mechanism, a precursor to the eurozone's current bailout funds. It would be repaid through the new three-year bailout being prepared for Greece, which is not expected to be ready for several more weeks.

However, the International Monetary Fund said Greece's debt can now only be made sustainable through debt relief measures that go far beyond what Europe has been willing to consider so far.

On the London Stock Exchange, Travis Perkins ended up 2.8% to 2,224.00 pence after Berenberg upgraded the building materials company to Buy from Hold, lifting its price target to 2,500p from 2,000p. Peer Wolseley also closed in the green, up 1.0% at 4,304.00p, after Berenberg raised its price target to 4,600p from 4,300p, keeping a Buy stance.

Burberry Group ended down 2.4% after the scarves and trench coat retailer warned Wednesday about a challenging market in Hong Kong and "a more adverse geographic mix". The company said retail revenue grew 10% to GBP407 million in the three months to June 30, as it experienced double-digit growth in Europe, the Middle East, India and Africa, high single-digit growth in the Americas, but a low single-digit decline in Asia Pacific. It also said profit for the year will be GBP20 million higher than the prior year if exchange rates remain at current levels.

But analysts remained supportive. "Admittedly, the situation in the Asia Pacific region remains mixed, particularly in Hong Kong where trading is under pressure," said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers. However, "the currency headwinds have improved, the company continues to refine its retail store portfolio to maximise selling opportunities, whilst its digital presence goes from strength to strength", he added.

Miner Lonmin was the best performer in the FTSE 250, up 5.2%, after being upgraded by Goldman Sachs to Hold from Sell.

Just Eat finished up 2.8% after Goldman resumed the coverage on the online takeaway platform by putting it onto its Conviction Buy List. The broker believes Just Eat should benefit as online penetration increases, saying that "the business is highly cash-generative, with low capital requirements and negative working capital."

JD Wetherspoon ended down 8.4% after it reported a rise in revenue in the 50 weeks to July 12, but reaffirmed that pretax profit for the full year is unlikely to be higher than the prior year. The pub company said that total sales increased 6.5% in the 11 weeks to July 12 and 7.6% in the 50 weeks to the same date, growing 2.9% and 3.4% on a like-for-like basis, respectively.

In the corporate calendar Thursday, Sports Direct International, Dixons Carphone and Dart Group release full-year results. Miner Anglo American issues a second-quarter production report, while Experian issues a first-quarter interim management statement. Hilton Food Group publishes a trading update, Microgen releases half-year results, and Polyus Gold publishes full-year results.

In the economic calendar, the eurozone consumer price index is due at 1000 BST, while the European Central Bank monetary policy decision is due at 1245 BST. 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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