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LONDON (Alliance News) - London share prices are higher Wednesday mid-morning amid reports that Greece will accept all the bailout conditions proposed by its creditors at the weekend, as UK manufacturing sector remained in a softer growth patch in June, according to Markit data.
The FTSE 100 is up 1.7% at 6,634.91, the FTSE 250 is up 1.2% at 17,744.67 and the AIM All-Share is up 0.8% at 761.37.
European major indices are also higher, with the CAC 40 in Paris up 2.5% and the DAX 30 in Frankfurt up 2.2%.
Greek Prime Minister Alexis Tsipras will accept all the bailout conditions proposed by the country's creditors at the weekend, with only a handful of minor changes, the Financial Times reported Wednesday, citing a letter written by Tsipras late Tuesday which it has obtained. Subsequently, Bloomberg also reported receiving the letter.
The FT reported that the letter was sent to the heads of the European Commission, International Monetary Fund and European Central Bank and said Athens will accept all the reforms for Greece's value-added tax system with one change: keeping a special 30% discount for Greek islands, many of which are in remote and difficult-to-supply regions.
The reports come ahead of another eurogroup meeting to talk about Greece on Wednesday, which has been re-scheduled at 1630 BST.
Most Greeks responding to a poll saying they would vote 'no' to the European bailout terms in this weekend's referendum, according to results published Wednesday, but the data also showed the 'yes' vote gaining ground.
The survey by ProRata for Greece's Efimerida ton Syntakton newspaper showed that the percentage of those planning to vote 'no' stood at 46%, while the 'yes' vote stood at 37%. The results reflect attitudes after the introduction of capital controls and the closure of banks, amid increasing uncertainty about the country's future in the eurozone.
The referendum will decide whether voters approve or reject a bailout proposal submitted by Greece's creditors - the European Commission, the European Central Bank and the International Monetary Fund. The survey was published hours after Athens missed the deadline for a EUR1.6 billion debt repayment to the IMF that was due at the end of June, the same day the European part of Greece's bailout expired.
Kit Juckes, analyst at Societe Generale, says that even though the people expected to vote 'no' is more than those voting for 'yes', the markets are calm. "It's all priced in, apparently," he says.
"The impression I get is still that the consensus view expects Greece to reach a deal with creditors and remain in the euro, either before Sunday or after a ?yes' vote," Juckes writes. "This may be right but seems complacent to me. The only thing we can be sure of is that there are many more twists and turns in this crisis and plenty of uncertainty ahead."
Outside Greece, UK manufacturing sector expanded for the twenty-seventh consecutive month in June, though the pace of growth unexpectedly eased to its weakest in 26 months due to moderation of growth in production and new orders, survey data from Markit Economics showed Wednesday.
The seasonally adjusted Markit/CIPS Purchasing Manager's Index dropped to 51.4 in June from 51.9 in May, which was revised from 52. Economists had expected an improvement in the index to 52.5. A PMI reading above 50 suggests expansion in the sector.
"The UK manufacturing sector had a disappointing second quarter overall. Growth trends in output and new orders were the weakest since the opening quarter of 2013, as a strong sterling exchange rate and subdued demand from mainland Europe offset the continued solidity of the domestic market," says Rob Dobson, senior economist at Markit.
The pound declined following the release of the manufacturing PMI data to USD1.5655.
There also were manufacturing PMI readings from other European countries. Germany's final manufacturing PMI rose to 51.9 from a 3-month low of 51.1 in May. The reading matched the flash estimate. Operating conditions have now improved for seven months running. At the same time, the manufacturing PMI for France improved to 50.7 from 49.4 in May. It was above the flash score of 50.5. The latest reading was above the neutral 50.0 mark for the first time since April 2014.
Meanwhile, the euro area manufacturing sector expanded as initially estimated in June. The manufacturing PMI rose to 52.5 in June from 52.2 in May. The reading came in line with flash estimate published on June 23. It was the highest reading since April 2014.
In London, drinks giant Diageo is up 1.3% after it said it has sold Gleneagles Hotel in Scotland to a private investment group led by real estate hospitality firm Ennismore, for an undisclosed amount. Gleneagles Hotel was owned by Diageo from 1984 and generated GBP43.5 million in revenue and an operating profit of GBP2.6 million in the year ended June 30, 2014.
In the FTSE 250, Serco Group is up 12% after the outsourcer said trading in the first half of 2015 has been slightly better than anticipated, though it maintained its expectations for the full year and still forecasts a fall in revenue and flat trading profit in the half-year period. Shore Capital and Liberum both retain a Hold stance on the company, agreeing that Serco Group is trading "a little better".
Betfair Group is up 4.5% after Morgan Stanley lifted the bookmaker's price target to 3,000 pence from 2,030p, keeping an Overweight stance.
Tullow Oil, up 2.4%, increased its full-year production guidance from West Africa but reported an expected fall in revenue and profit in the first half of 2015, reflecting the fall in oil prices.
The independent Airports Commission on Wednesday gave its backing to the expansion of Heathrow airport after concluding that the move would deliver the most economic benefits to the UK. The report said the third runway at Heathrow, the most expensive and the most politically controversial of the three options tabled to expand airport capacity in Britain, would generate up to GBP147 billion for the economy over 60 years and create 70,000 new jobs by 2050.
Ryanair Holdings immediately issued a statement in response saying the proposal doesn't go far enough and won't solve problem of restricted airport capacity in the South East.
Travel operator TUI is up 3.4%, while airlines easyJet and Ryanair also are higher, up 2.7% and 3.1%, respectively. International Consolidated Airlines Group shares are up 2.0%.
In the economic calendar, in the US, ADP employment change is due at 1315 BST, while ISM manufacturing PMI is at 1500 BST and EIA crude oil stocks at 1530 BST.
By Daniel Ruiz; danielruiz@alliancenews.com
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