Johnson Matthey Share News (JMAT)

LONDON (Alliance News) - London share prices are higher midday Tuesday, while US stocks are expected to open higher, joining stock markets in Europe and Asia which are enjoying some relief from previous losses caused by uncertainty over the Greek debt negotiations.

Investors are taking hope from the seemingly positive outcome of the Eurogroup meeting held in Brussels on Monday, though with still no deal on Greece's debt problems and with a new summit scheduled for Thursday.

In London, the FTSE 100 is up 0.3% at 6,842,43, the FTSE 250 is up 0.4% at 17,982.32, while the AIM All-Share is flat at 769.84. Meanwhile, European major indices also are higher, with the CAC 40 in Paris up 1.2% and the DAX 30 in Frankfurt up 1.0%.

Asian stocks closed higher Tuesday. The Japanese Nikkei 225 closed up 1.9% Tuesday at a 15-year high of 20,809.42 point, while in China, the Hang Seng closed also up 0.9% in Hong Kong, and the Shanghai Composite finished up 2.2%..

In New York, stocks closed broadly higher Monday, with the DJIA up 0.6% at 18,119.78 and the S&P 500 up 0.6% at 2,122.85. The Nasdaq Composite closed up 2.2% at 5,153.97, reaching a new closing high.

"We are expecting the Dow Jones to open ten points higher, at 18,129, and this is down to the positive sentiment surrounding the Greek situation, for now," says IG Markets analyst David Madden. "The US index futures are catching the tail end of the European rally, and there is little else to go on. The move in the US market is a fraction of that experienced in continental Europe, and it seems that 18,200 is out of reach for now."

US futures also point to a higher open, with the DJIA, the S&P 500 and the Nasdaq 100 pointed all up 0.2%.

In the rest of the economic calendar for Tuesday, US durable goods are due at 1330 BST, the Redbook index is due at 1355 BST, and US Markit manufacturing PMI is due at 1445 BST. Meanwhile, US new homes sales are at 1500 BST.

"With last week’s Federal Open Market Committee meeting reiterating that the Committee’s position on the timing of a rise in the policy rate remains 'data dependent', this afternoon’s durable goods orders for May will be of interest," says Lloyds Bank.

"Headline (US durable goods) orders are expected to decline for the second consecutive month on the back of a fall in transportation orders ahead of the mid-June Paris air show," writes Lloyds. "However, the less volatile ex-transportation figure is anticipated to rise by 0.8% on the month, which would be the strongest pace since last August."

In Greece, there are some "tough measures" included in the reform proposals the Greek government has presented to its international creditors, a government spokesman said Tuesday, indicating that a deal was close, despite a backlash already looming within the country.

Late-night negotiations in Brussels have put Greece closer to striking a deal with its creditors than it has been in months, as all sides worked to avoid a default. However, the remaining issues - preferential tax treatment for some Greek islands, for example - still promise to be contentious.

"I'm convinced that we will come to a final agreement in the course of this week, for the simple reason that we have to find an agreement this week," said European Commission President Jean-Claude Juncker, following the emergency summit in Brussels.

Greece has been negotiating since February with the commission, the European Central Bank and the International Monetary Fund on reforms needed to unlock EUR7.2 billion in bailout aid. The talks have entered crunch time, with just days left for Greece to access funds before the European share of its rescue package expires on June 30.

On the London Stock Exchange, Ladbrokes is leading the mid-cap FTSE 250 index, up 16%, after confirming it is holding talks with unlisted rival Gala Coral Group on a possible merger of Ladbrokes and Coral Retail, Eurobet Retail, and Gala Coral's Online businesses. Ladbrokes said the talks are focusing on plans to create an enlarged business which would be traded on the main market of the London Stock Exchange, where the betting firm currently is traded as a member of the FTSE 250 index.

Ladbrokes said there is no certainty a deal will be done between the two or on the timing of any agreement. It also said that, should the deal proceed, it may undertake an equity placing in order to strengthen the balance sheet of the combined business. The company said that the results of its Business Review, due to be published on June 30, may be rescheduled dependent on how talks with Gala Coral progress.

Shore Capital analyst Greg Johnson says the announcement surprised the market, saying that the rationale for the merger is compelling. However, the analyst sees "significant potential hurdles" to the deal, warning about competition regulation, as the combined entity would equate to broadly half the UK retail betting market.

In the FTSE 100, Johnson Matthey is up 2.0% after being upgraded by Citigroup to Buy from Neutral, while Diageo and Vodafone Group are up 1.9% and 1.2%, respectively, after Nomura upgraded both stocks to Buy from Neutral.

In the AIM All-Share, Imaginatik is up 9.7%. Shares in the company have pushed higher in recent days amid reports that former Quindell chairman Rob Terry and his Quob Park Estate investment vehicle was building up a stake in the company. On Tuesday, Imaginatik confirmed that Terry has built up a stake in the company of more than 3%. Terry now holds 2.5 million shares in the company, both directly and via Quob Park, representing 3.032% of the issued share capital of the company.

Meanwhile, Bilby is up 9.4%. The company, which is the holding company for gas heating and building services provider P&R Installation Co, said its pretax profit rose on the back of a rise in revenue, and as it said it would pay its maiden dividend, having listed in London in March. It also said it sees further opportunities for growth.

Alecto Minerals is down 9.7% at 0.149 pence after the Africa-focused minerals explorer raised GBP300,000 via a discounted share placing. It issued 300 million shares at 0.1p per share via Beaufort Securities.

By Daniel Ruiz; danielruiz@alliancenews.com

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