LONDON (Alliance News) - UK shares are set to open higher Tuesday, ahead of an emergency eurozone summit at which Greece is due to present its latest debt-bailout proposals.
Greece's stance in its upcoming round of negotiations with fellow eurozone members is supported by all Greek political parties save the Communist Party, said Defence Minister Panos Kammenos on Monday.
"The prime minister will go to Brussels to negotiate on behalf of all the Greek people," according to Kammenos in televised comments after a meeting among opposition leaders, Greek Prime Minister Alexis Tsipras and Greek President Prokopis Pavlopoulos.
French President Francois Hollande and German Chancellor Angela Merkel said Monday that they respect the outcome of the weekend's Greek referendum opposing more austerity and are open to negotiations. Hollande stressed the "urgency" of finding a solution to the economic impasse, while Merkel said it is up to Tsipras to make proposals about how to lead the Greek economy forward.
"The situation has to be solved," Merkel said, adding that the last offer made to Greece before it opted for a controversial referendum was "generous."
"It's up to Tsipras to put forward a serious and credible proposal that translates into a long and lasting programme," Hollande said. Tsipras spoke with both Hollande and Merkel before the German and French leaders met in Paris.
Also Monday, the European Central Bank maintained its emergency liquidity assistance for Greek banks at the June 26 level of EUR89 billion, with haircuts on collateral for ELA adjusted. The decision by the Governing Council of the ECB comes after discussing a proposal from the Bank of Greece. ELA can only be provided against sufficient collateral.
"This move is likely to increase criticism that the [European] Central Bank is getting involved in exerting political pressure and acting beyond its mandate of price stability, and as lender of last resort, which any credible central bank should do as a matter of course," says Michael Hewson, chief market analyst at CMC Markets UK.
"All the ECB has done is make it more likely that Greek banks will run out of money in a matter of days," Hewson writes. "Furthermore it remains highly unlikely that the Greek government will be able to make it to the next key payment deadline of July 20 when a EUR3.5 billion bond to the ECB becomes repayable."
IG says futures indicate the FTSE 100 to open 16 points higher at 6,551.90. The index closed down 0.8% at 6,535.68 points.
In Asia on Tuesday, the Japanese Nikkei 225 trades up 1.5%. The Hang Seng in Hong Kong trades down 1.1% and the Shanghai Composite is down 2.7%.
Wall Street ended lower Monday. The DJIA and the Nasdaq Composite closed down 0.3%, while the S&P 500 ended down 0.4%.
In the corporate calendar Tuesday, Cineworld Group and Connect Group issue interim management statements, ASOS issues a third-quarter trading statement and Robert Walters published a second-quarter trading statement. BACIT, Solid State and Sepura release full-year results, while McBride issues a trading update.
In the economic calendar, German and UK industrial production figures are due at 0700 BST and 0930 BST, respectively, while the UK manufacturing production is due at 0930 BST. The UK NIESR GDP estimate is due at 1500 BST. In the US, the trade balance is due at 1330 BST, and the Redbook index is due at 1355 BST.
By Daniel Ruiz; danielruiz@alliancenews.com
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