LONDON (Alliance News) - UK stock prices are mixed Wednesday midday as Wall Street is called higher, with focus shifting to testimony by US Federal Reserve Chair Janet Yellen to Congress days after she warned that the central bank is likely to start raising US interest rates this year.
The FTSE 100 is up 0.2% at 6,763.52, the FTSE 250 is down 0.1% at 17,620.12 and the AIM All-Share is flat at 755.09. In Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt are both up 0.1%.
US futures point to a positive open on Wall Street, with the DJIA and the S&P 500 pointed up 0.1% and the Nasdaq 100 up 0.2%.
"Will Ms Yellen feel the need to reiterate warnings that the time for getting rates off the zero bound is now approaching?," asks Kit Juckes, analyst at Societe Generale.
US Federal Reserve Chair Janet Yellen said in a speech on Friday that the US central bank is likely to begin tightening "at some point later this year" after seven years of unprecedented slack monetary policy. The Fed's chief is due to testify to Congress in the Semiannual Monetary Policy Report starting at 1500 BST.
However, SocGen's Juckes notes that Tuesday's US retail sales data for June was weak, as was the small business confidence index. "A bland warning that rates will have to go up eventually is probably neutral for FX markets. Anything more dovish than that, and equities will be on a roll, [with] the dollar softer in the process."
Also in the US economic calendar, US industrial production is due at 1415 BST, while the US producer prices index is due at 1430 BST. EIA Crude Oil Stocks are due at 1530 BST. The Fed's Beige Book is due at 1900 BST.
US Treasury Secretary Jacob Lew is due to travel to Germany and France for talks on the Greek bailout deal, officials said Tuesday. Lew is expected Wednesday to meet European Central Bank President Mario Draghi in Frankfurt, while he is due in Berlin on Thursday to meet German Finance Minister Wolfgang Schaeuble.
Lew was then to go to Paris to meet French Finance Minister Michel Sapin before returning to Washington, the US Treasury Department said.
Efforts to pass tough austerity measures were set to dominate in Greece's Parliament Wednesday as leaders worked to secure a new bailout designed to keep the country out of bankruptcy. Some analysts think the results from the vote are likely to be known at 2000 BST.
The bill, which was presented in Parliament 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 measures include streamlining Greece's value-added tax system, reforming its pension system and safeguarding the independence of the national statistics office ELSTAT.
Meanwhile, 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.
In the UK, jobless claims increased unexpectedly in June, data from the Office for National Statistics showed Wednesday. 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 since October 2012.
During March to May, the jobless rate came in at 5.6%, up from 5.5% in the three months to February but lower than 6.5% seen in the same period a year earlier, the statistical office said. Pay for employees including bonuses increased by 3.2% in three months to May and that excluding bonuses by 2.8%.
Following the release of the data, the pound dropped to USD1.5601 but has recovered some ground since and now stands at USD1.5639.
On the London Stock Exchange, mining stocks are higher after China's economy grew in the second quarter of this year by 7% year-on-year, the National Bureau of Statistics announced, slightly outpacing predictions. Growth also had been 7% in the previous quarter, according to the authority. Analysts had expected a slightly weaker growth of 6.9% for the second quarter.
Anglo American, up 2.5%, Fresnillo, up 2.4%, Rio Tinto, up 2.0%, Glencore, up 1.6%, BHP BIlliton, up 1.4%, Antofagasta, up 1.1%, are amongst the best blue-chip performers in London. In the FTSE 250, Lonmin is up 6.1% and Kaz Minerals is up 4.4%.
In the AIM All-Share, Edenville Energy is up 7.4%. The company said it has started the formal review process for the Rukwa power plant feasibility with Tanzania's Ministry of Energy and Minerals and Tanesco, the country's power generation, transmission and distribution body. Edenville said the formal process will review and assess proposed power generation projects in the country. The start of the review will mean Edenville can advance talks on power purchase agreement tariffs and plan the integration of its power plant into the Tanzanian grid.
Falanx Group is off 23%. The group has swung to a pretax loss in its financial year to the end of March as its revenue halved. It said its pretax loss for the year was GBP2.2 million, compared with a GBP9,488 profit it made a year earlier, as revenue fell to GBP1.9 million from GBP4.4 million.
The fall was primarily to the loss of a contract for its Falanx Resilience project-based consultancy in the Middle East. Falanx said it remains hopeful it will secure the work it lost again, but the contract it held in an unnamed Middle Eastern country was put on hold following the death of a leader.
By Daniel Ruiz; danielruiz@alliancenews.com
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9 Nov 2015 09:25
