Last checked at LONDON (Alliance News) - London share prices ended lower Friday amid caution ahead of yet another Eurogroup meeting, scheduled for Saturday, and yet another attempt to find a deal between the Greece and its creditors.
On the UK company front, Tesco led the FTSE 100 gainers after reporting an slower decline in like-for-like sales in the first quarter of its financial year. The supermarket's sales results were an improvement on the immediately previous quarter and ahead of market expectations, and its shares surged following the announcement.
The FTSE 100 ended down 0.8% at 6,753.70 on Friday, but 0.6% higher for the week as a whole. The FTSE 250 ended down 0.7% at 17,822.33, and the AIM All-Share ended down 0.5% at 768.54.
Meanwhile, European major indices outperformed London, with the CAC 40 in Paris closing up 0.6% and the DAX 30 in Frankfurt adding 0.2%.
"Eurozone indices have still made gains on expectations that a deal will be struck," said IG analyst Chris Beauchamp. "If investors are wrong, Monday could be ugly, since it seems doubtful that markets could open next week without a heavy sell-off if no deal has been agreed."
Eurozone finance ministers will hold a crisis meeting about Greece on Saturday from 1300 BST - their fifth meeting of the kind in ten days. A decision has to materialize then or it will be "too late", the president of the Eurogroup, Jeroen Dijsselbloem, said Friday.
Greek Prime Minister Alexis Tsipras also conducted talks with German Chancellor Angela Merkel and French President Francois Hollande on the margins of an European Council summit in Brussels on Friday.
A government statement said Tsipras emphasized that "the Greek side does not understand the insistence of creditors on such hard measures." But German Finance Minister Wolfgang Schaeuble argued that Greece has to comply with the eurozone's rules, just like any other member state.
"No country in a monetary union can spend limitlessly at the expense of others," Schaeuble said during a visit to Frankfurt.
The European part of the Greek bailout is due to expire on Tuesday - the same day Athens owes a debt repayment of EUR1.6 billion to the International Monetary Fund. Greece needs the EUR7.2 billion funds from the European part of the country's bailout to pay the IMF.
The creditors - the European Central Bank, the IMF and the European Commission - were willing to offer Greece an extension of the European part of its bailout until November, making a total of EUR15.5 billion in existing aid available to Athens, a eurozone source said to dpa on condition of anonymity. Under the proposal, a first tranche of EUR1.8 billion would be available to Greece immediately if the country enacts budget and financing laws on Sunday.
However, "yet just as hopes of a deal appeared on the horizon, Athens rejected the extension deal, calling its creditors’ behaviour ‘unacceptable’," said Spreadex analyst Connor Campbell. "The initial news lifted the DAX, CAC and co. into the green, but that Greek dismal began to cool the enthusiasm of investors as the afternoon wore on."
In the US, at the European equity markets close, Wall Street was mixed, with the Dow Jones Industrial Average up 0.6%, the S&P 500 index up 0.2% and the Nasdaq Composite down 0.3%.
Consumer sentiment in the US has improved by even more than previously estimated in the month of June, according to a report released by the University of Michigan on Friday. The report said the consumer sentiment index for June was upwardly revised to 96.1 from the mid-month reading of 94.6. Economists had expected the index to be unrevised from the preliminary reading, which was already up sharply from the final May reading of 90.7.
Richard Curtin, the survey's chief economist, said: "Consumers voiced in the first half of 2015 the largest and most sustained increase in economic optimism since 2004."
On the London Stock Exchange, Tesco led the FTSE 100, up 2.7%. The UK's largest supermarket by market capitalisation reported a 1.3% drop in group like-for-like sales excluding fuel in the 13 weeks to May 30, as combined UK and Republic of Ireland like-for-like sales declined 1.5% and international like-for-likes fell 1.0%.
However, this was an improvement on the fourth quarter of the last financial year which saw like-for-like sales fall 1.8% on a group basis, 2.0% in the UK and Ireland and 1.6% internationally. The result also was better than first quarter a year earlier, when sales on the same basis fell 3.4% for the group, 4.1% in the UK and Ireland, and 1.7% internationally, and it beat market consensus of a 1.6% to 3.0% decline.
The positive results lifted fellow supermarkets J Sainsbury, up 0.7%, and Wm Morrison Supermarkets, up 1.1%.
Chip maker ARM Holdings ended down 5.1% after Bernstein downgraded it to Underperform from Market-Perform. Also down was Primark-owner Associated British Foods, falling 1.2% after being downgraded by Numis to Reduce from Hold.
In the FTSE 250, Fidelity China Special Situations ended down 5.3%. The stock took a hit after the Shanghai Composite closed down 7.4% Friday in reaction to the Chinese securities regulator tightening margin financing. The Securities Regulatory Commission published draft rules earlier this month that would cap the size of the country's margin trading and short selling, for the first time, at four times a brokerage's net capital. In Hong Kong, the Hang Seng index ended down 1.8%.
In a very light UK corporate calendar Monday, Porvair releases full-year results.
In the economic calendar Monday, UK consumer credit is due at 0930 BST, while eurozone economic sentiment is at 1000 BST and German inflation is at 1300 BST. In the US, pending home sales are due at 1500 BST, while the Dallas Fed Manufacturing Business index is due at 1530 BST.
By Daniel Ruiz; danielruiz@alliancenews.com
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23 Jul 2015 05:18