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LONDON (Alliance News) - London stocks are trading largely higher mid-morning Friday, as investors await the outcome of the Eurogroup meeting of finance ministers to discuss Greece's proposal for a six-month extension to its loan agreement.
The FTSE 100 trades up 0.1% at 6,897.45, the FTSE 250 is down 0.1% at 17,028.08, and the AIM All-Share is slightly higher at 709.74.
On Thursday, Greek Finance Minister Yanis Varoufakis wrote to Eurogroup chief Jeroen Dijsselbloem to formally request a six-month extension to the agreement governing its bailout. But the terms of the Greek proposal were dismissed out of hand by the German finance ministry, saying the proposal "does not correspond" to criteria agreed by eurozone finance ministers earlier this week.
Time is running out for Greece, since the European portion of the existing bailout is due to expire on February 28. Economists fear that Athens could run out of money within weeks if the international financial taps are turned off, potentially triggering an exit from the euro currency bloc.
"The game of cat and mouse between Germany and Greece continues, and the debt-stricken nation will have to compromise in order to get assistance from the European Central Bank. The eurozone equity market is being held back by the developments in Greece and will remain offside until a deal is brokered," says IG market analyst David Madden.
European shares are trading lower with the French CAC 40 and the German DAX 30 both down 0.4%.
Growth of business activity in the euro area economy hit a seven-month high in February, flash data from Markit Economics showed. The composite output index rose to 53.5 in February from 52.6 in January. It was also above the expected score of 53. A reading above 50 indicates expansion in the private sector.
The Purchasing Managers' Index for eurozone services came in at 53.9 in February, up from 52.7 in January. It was expected to rise slightly to 53. Meanwhile, eurozone manufacturing PMI rose less-than-expected to 51.1 from 51 in January. Economists had forecast the index to rise to 51.5.
"Undeterred by the ongoing Greek debt crisis, economic growth is gathering momentum and looks set to gain further traction in coming months," Chris Williamson, chief economist at Markit says.
Germany's private sector also grew at its fastest pace in seven months in February. The Markit composite output index came in at 54.3 in February, up from 53.5 in January.
UK retail sales declined slightly more than expected in January, the Office for National Statistics showed. Retail sales dropped 0.3% in January from the prior month, which was the first decline in four months. Economists had forecast sales to fall 0.2% after rising 0.2% in December. The monthly fall was driven by food, textile, clothing and footwear and other store sales.
Standard Life is the best performer on the FTSE 100, up 3.2%. The savings and investment company reported a 19% rise in operating profit before tax from continuing operations in 2014, bolstered by rising assets under administration on the back of net inflows, positive market movements and the acquisition of Ignis Asset Management. The group said that operating profit before tax from continuing operations amounted to GBP604 million in 2014.
Weir Group is another strong blue-chip performer, up 2.7% after it was upgraded to Buy from Neutral from Goldman Sachs. While DIY retailer Kingfisher is the worst FTSE 100 performer after it was downgraded to Underweight from Equal Weight by Barclays.
Serco Group leads the FTSE 250 gainers, up 9.4% after it was upgraded to Neutral from Underperform by Credit Suisse.
Man Group, up 1.4%, is one of the biggest mid-cap gainers. The hedge fund investment manager confirmed a conditional deal to buy the investment management business of NewSmith LLP, an equity investment manager with USD1.2 billion of funds under management.
US Markit Manufacturing PMI is expected at 1445 GMT.
US futures point to a mixed opening. The DJIA and S&P 500 are both indicated down 0.1%, while the Nasdaq Composite is expected to open fractionally higher.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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