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LONDON (Alliance News) - London's main stock indices are reading lower mid-morning Friday as the German Parliament prepares to vote on the terms of the third Greek bailout, while company-specific news sees Royal Mail and retailer Marks and Spencer among the worst blue-chip fallers.
The FTSE 100 trades down 0.2% at 6,783.20, the FTSE 250 is also down 0.2% at 17,737.29 while the AIM All-Share index trades up 0.2% at 757.91.
European stock indices also trade lower with the CAC 40 in Paris down 0.1% and the DAX 30 in Frankfurt down 0.4%.
Royal Mail is the biggest FTSE 100 faller, down 2.0% after UK media and communications regulator Ofcom outlined the scope of its review into the regulation of the postal service operator, including whether any price controls should be imposed on the company given the lessening of competition in the postal services market.
The review will examine whether any changes to the current postal regulatory framework could be appropriate in order to maintain the universal postal services and will study how to ensure Royal Mail continues to become more efficient given the absence of any significant end-to-end competition for the letters market.
Marks & Spencer Group is trading down 1.1% after it said John Dixon, its General Merchandise division executive director, has left the company to pursue other career opportunities and it has appointed the head of its Food division to replace him.
Dixon will leave the retailer's board with immediate effect and will leave the company on a date to be agreed. Dixon said he is leaving to become the chief executive of another company, though he did not name the company.
Steve Rowe will take on responsibility for the General Merchandise business. Rowe is currently the executive director of Food at the company and will be replaced, on an interim basis, by Andy Adcock, who is currently the trading director of the Food division.
"John Dixon's departure comes as Marks and Spencer's general merchandise division, especially womenswear, have defied repeated efforts by management to improve sales over several years. Whilst the retailer saw tentative signs of improvement in General Merchandise over the last year, the most recent trading update once again showed a decline as like for like sales fell 0.4%," Helal Miah, an investment research analyst at The Share Centre says.
"If his successor, Steve Rowe, can finally reach the potential of increase profitability in general merchandise, this could be positive news for investors. He has been with M&S for over 26 years and therefore brings significant internal knowledge to the role," Miah adds.
Elsewhere on the corporate front, some big names in the mining sector also are weighing on the blue-chip index. Antofogasta trades down 1.8%, BHP Billiton is down 1.5% and Anglo American is down 0.9%.
In the FTSE 250 index, B&M European Value Retail is the biggest gainer, trading up 3.4%. The discount retailer said its sales revenue rose in the first quarter of its financial year, despite a slowdown in like-for-like sales growth year-on-year.
It said total group sales revenue for the 13 weeks to June 27 was GBP456.6 million, up from GBP367 million in the comparable period a year earlier. Total group sales growth in the quarter was 24%, slowed from the 32% growth it posted a year earlier, while its like-for-like sales growth slowed to 1.1%, compared to 6%.
Retaurant Group trades down 2.6% after Nomura cut the company to Neutral from Buy. Meanwhile, Ocado Group trades down 1.7% after UBS cut the online grocery company to Neutral from Buy.
888 Holdings said it has struck a deal to acquire FTSE 250-listed online gaming rival Bwin.Party Digital Entertainment in cash and shares, seemingly trumping the previous offer made for Bwin.Party by AIM-listed GVC Holdings.
888 shares are up 7.5%, the best performer in the FTSE All-Share, while Bwin.Party is up 0.2%. GVC shares are trading higher, up 0.8%.
888 has been competing with GVC to acquire Bwin.Party since May, when 888 entered the fray after GVC had already made its intentions clear. GVC made a bid for Bwin.Party last week which valued the company at 110p per share, or GBP906.5 million. Its offer is being co-financed with Canadian gaming company Amaya Gaming Inc.
The 888 offer is lower than GVC's, valuing Bwin.Party at a total of GBP898.3 million. The consideration comprises 39.45p in cash and 0.404 of a new 888 share per Bwin.Party share. 888 said the offer values Bwin.Party shares at 104.09p, a 16% premium to their closing price on May 14, when Bwin.Party first entered talks with its potential suitors.
Bwin.Party said it had decided to go with 888's offer as the bid from GVC, which though containing "many attractive features", also carried "additional execution risks".
The German Parliament is expected to agree to launch negotiations with Greece for its third rescue package in five years, despite growing opposition in the ranks of Chancellor Angela Merkel's government about providing Athens with fresh aid.
At a meeting late Thursday, 48 lawmakers in Merkel's 311-member conservative Christian Democrat-led (CDU) bloc signalled plans to vote against giving her government a mandate to negotiate a new three-year lifeline worth up to EUR86 billion for Greece.
Despite the expectations of an agreement to launch negotiations, IG market analyst Alistair McCaig believes there will still be some intense debate on the Greek situation.
"German parliament is yet to ratify the outline basis for the Greek bailout deal and judging by the comments coming from German finance minister Wolfgang Schäuble in the run-up to today, we can expect some choice phraseology in what will no doubt be a lively debate. Trading floor banter has suggested that the Bundestag might have all chipped in to get Angel Merkel her own little Greek island for her birthday today," McCaig says.
Schäuble said in an interview Thursday that debt forgiveness for Greece should also mean its exit from the eurozone.
"A true haircut on debt is not compatible with membership in the currency union," the conservative politician told Deutschlandfunk, while noting that a haircut "would possibly be the better path for Greece."
Bank of England Governor Mark Carney hinted on Thursday that the central bank will start to consider changing its UK interest rate policy at end of 2015, but said that any increases would be slow and suggested that interest rates would rise to no more than 2.25% in the medium term.
Speaking at Lincoln Cathedral in a speech about the Magna Carta and the Bank of England, Carney said the decision on when to start the process of raising interest rates in the UK, from the current 0.5% rate, "will likely come into sharper relief around the turn of this year".
Carney's comments pushed the pound higher against the euro, reaching a new seven-and-a-half-year high Friday at EUR1.43990.
Still ahead in the economic calendar, there are US inflation data at 1330 BST alongside housing starts and building permits. At 1500 BST there is the Reuters/Michigan consumer sentiment index.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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