LONDON (Alliance News) - UK stocks are set to open a cautiously higher Wednesday ahead of a quiet day in the economic calendar, leaving little to distract investors from Greece's debt problems.
Greece is due to make a EUR300 million payment to the International Monetary Fund next week, and despite a Greek government spokesman playing down suggestions on Monday that the country is about to default on its debt, investors remained concerned about the situation as a "cash-for-reforms deal" with EU creditors continues to elude the nation.
"Greece appears no closer to agreeing a cash-for-reforms deal with its creditors despite repeated claims from [Greek finance minister Yanis] Varoufakis that a deal is close. Investors may be more encouraged by those claims had we not had such mixed messages from officials recently," says Craig Erlam, senior market analyst at Oanda.
"The one thing that appears clear now is that Greece will not be able to repay EUR300 million to the IMF on 5 June. With EUR1.6 billion in total due to be repaid to the IMF next month that would have given negotiations the strict deadline they in all honestly have been craving if any real progress has been made," he adds.
According to IG, futures indicate the FTSE 100 to open higher at 6,952.5. The index closed down 1.2% at 6,948.99 on Tuesday as strong data from the US reignited investor concern about the potential for a US interest rate hike, sending the dollar higher against other major currencies. The strong dollar weighed heavily on commodities prices, causing the London resources sector to fall.
In New York on Tuesday, the DJIA and the S&P 500 both ended down 1.0%, and the Nasdaq Composite closed down 1.1%.
In Asia Wednesday, Tokyo's Nikkei 225 closed up 0.2%, the Hang Seng in Hong Kong trades down 0.8%, and the Shanghai Composite is up 0.7%.
De La Rue reported a drop in pretax profit in its recently completed financial year, as margins were squeezed by pricing pressure and the company achieved lowers levels of new business than expected in its identity systems and security products. Weakness in the euro has put further pressure on its profitability in the new financial year, the company said.
Rolls-Royce Holdings said it has secured a contract from US aerospace and defence company General Dynamics' European Land Systems unit for 589 MTU Seris 199 diesel engines. The order is worth around EUR80 million and the engines are to be used in the SCOUT Specialist Vehicle General Dynamics has built for the British Army. It will be the first time MTU engines have been used by the British Army.
Irish flag carrier Aer Lingus Group late on Tuesday said it has moved a step closer to being taken over by British Airways owner International Consolidated Airlines Group in a EUR1.4 billion deal, after the Irish government gave its backing to the deal.
Brewin Dolphin's chief executive said the wealth manager is entering the final stages of the transformation programme launched in 2012, as the company reported higher first-half pretax profit and discretionary funds under management.
In a statement, Brewin Dolphin said its discretionary funds under management amounted to GBP26.2 billion at the end of March, up from GBP24.0 billion at the end of its last financial year and from GBP22.7 billion at the end of the first half of that year.
Elsewhere in the UK corporate calendar, there were full-year results from self-managed investment trust Caledonia Investments, TR Property Investment Trust, Central and Eastern Europe-focused budget carrier Wizz Air, and real estate investment trust McKay Securities, amongst others. Property company Urban&Civic reported half-year results, while HSS Hire Group issued a trading statement.
In a thin economic calendar, there is French consumer confidence at 0745 BST before weekly US MBA mortgage applications at 1200 BST and the Redbook index at 1355 BST.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
Copyright 2015 Alliance News Limited. All Rights Reserved.
