LONDON (Alliance News) - UK shares are set to open higher Thursday, after the Greek Parliament late Wednesday approved the new debt bailout programme agreed between Prime Minister Alexis Tsipras and eurozone leaders at the start of the week.
IG says futures indicate the FTSE 100 to open 26 points higher at 6,779. The index closed perfectly flat on Wednesday at 6,753,75 points.
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.
The approval of the economic measures passed with 229 votes in favour in the 300-seat chamber, but 38 Syriza lawmakers abstained or voted against the government. This included former Finance Minister Yanis Varoufakis and the current Energy Minister Panagiotis Lafazanis, Deputy Labour Minister Dimitris Stratoulis and speaker of parliament Zoe Constantopoulou.
The measures includes tax hikes and raising the retirement age, among others. The focus now shifts to the European Central Bank and other eurozone members to release emergency funds to enable reopen Greek banks and buffer up its literally empty coffers.
"The important thing at this stage though is that the vote has passed and discussions can now begin today at a eurogroup meeting regarding a bridging loan that will cover Greece?s financing needs while the details of the bailout deal are agreed," says Oanda analyst Craig Erlam.
The ECB's Governing Council meets in Frankfurt later on Thursday, while Germany's Parliament will reconvene to vote Friday on whether to start bailout negotiations.
But before that, the ECB is due to release its monetary policy decision at 1245 BST, followed by a press conference by President Mario Draghi at 1330 BST.
In Asia on Thursday, the Japanese Nikkei 225 trades up 0.6%. In China, the Hang Seng is down 0.2% and the Shanghai Composite is up 0.6%.
The Asian Development Bank cut its economic growth forecast for developing Asia amid slower-than-expected growth in the US and China. The Manila-based bank said the region's gross domestic product was projected to grow by only 6.1% from the original forecast of 6.3% in its annual Asian Development Outlook published in March.
"With the US contracting in the first quarter and some underperformance within Asia and the Pacific, growth forecasts for developing Asia are adjusted down," the supplement report said.
The US Federal Reserve is getting more optimistic that the US economy is on the right track after a second straight rough winter. With the jobs market improving, each of the Fed's 12 districts reporting activity expanded from mid-May through June, according to the most recent Beige Book. Respondents told the Fed that consumer spending is picking up, the housing market is steady, and lending activity in on the rise. The Beige Book is expected to give the Fed another reason to raise interest rates, perhaps as early as September.
Fed Chair Janet Yellen said as much Wednesday when she gave a relatively upbeat assessment of the U.S economy to Congress. She said the Fed was going to raise rates this year if the recovery proceeds.
Wall Street ended flat to lower Wednesday. The DJIA closed flat, while the S&P 500 and the Nasdaq Composite ended down 0.1%.
Anglo-Australian mining giant Rio Tinto reported that its global iron ore production for the second quarter grew 9% from last year, while shipments increased 8%. However, the company lowered its forecast for full-year iron ore shipments, citing weather disruption in the first half of the year at its Pilbara operations.
Rio Tinto, the world's second-largest iron-ore producer, said its global iron ore production for the second quarter increased 9% on a 100% basis to 79.7 million tons. The company's second quarter iron-ore production also rose 7% sequentially. Iron ore sales account for roughly 90% of the profit of Rio Tinto.
Imperial Tobacco Group is considering selling an additional stake in its Spanish logistics unit Cia de Distribution Integral Logista Holdings, Bloomberg reported, citing people with knowledge of the matter. Imperial Tobacco, which owns about 70% of Logista, may reduce its holding to just over 50% via a sale to institutions, the report stated. The company could also seek a buyer for the entire stake, the report added. Spokesmen for Imperial and Logista declined to comment.
In the UK 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. 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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