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LONDON (Alliance News) - London share prices are set to open lower, as Greek debt negotiation get underway again Thursday at the European Council meeting taking place in Brussels, after Wednesday talks proved inconclusive.
IG says futures indicate the FTSE 100 to open 17 points lower at 6,827.50. The index closed up 0.2% on Wednesday, outperforming major European and US indices.
Hopes remain that a deal still can be struck, paving the way for unlocking financial aid.
The Eurogroup meeting, which was scheduled for 2000 BST Wednesday, ended in a little more than an hour as finance ministers suspended talks.
"There is no agreement yet. Work will go on and the Eurogroup will reconvene Thursday...in order to prepare for the European Council," Eurogroup Chief Jeroen Dijsselbloem said in a release.
CMC Markets chief market analyst Michael Hewson believes that the closer we get to the June 30 deadline, it is becoming increasingly apparent that Greece will not be repaying the International Monetary Fund its EUR1.5 billion on time.
"Yesterday?s declines in equity markets were pretty much inevitable given the euphoria of earlier in the week, after the creditors not surprisingly pushed back on the proposals, so seized upon by the markets, that were put forward by the Greek government," Hewson says. "One thing this push-back by the creditors has done is shift the focus away from the other problem of how to get the proposals passed firstly by the Greek parliament, and then by the German Bundestag, but that is likely to be a problem for another day."
The European Council summit of EU national leaders is expected to start Thursday at 1600 BST until Friday afternoon.
Apart from the economic situation in Greece, the deadly migration crisis in the Mediterranean Sea and the diplomatic tensions with Russia will be on the agenda too, along with the European identity crisis in Britain. Hopes for a blockbuster free trade deal with the US and dreams of a stronger eurozone union will round off the leaders' two days of talks.
On Tuesday, US President Barack Obama's push for greater authority to negotiate trade deals moved a step closer to reality after the measure cleared a key procedural hurdle in the Senate.
Wall Street ended lower on Wednesday, with the DJIA down 1.0%. The S&P 500 and the Nasdaq Composite both ended down 0.7%. In Asia on Thursday, the Japanese Nikkei 225 closed down 0.5%, while in China, Hong Kong's Hang Seng is down 0.7% and the Shanghai Composite is reading down 1.4%.
On the UK corporate front, Debenhams said that group like-for-like sales in the 15 weeks to June 13 were flat, but said it is on track to meet full-year market expectations. The FTSE 250-listed department store operator said that while like-for-like sales were flat in the 15-week period, they were up 0.9% in the 41 weeks to June 13. The New Season Spectacular was brought forward into the first half of the year, which together with other promotional changes diluted like-for-like sales by around 1%, it said.
FTSE 100-listed Standard Life said it will close its insurance business in Singapore, resulting in a non-operating loss of GBP45 million. The move means that the business is no longer accepting new applications or contributions to existing plans. The GBP45 million cost covers impairment of intangibles, including deferred acquisition costs and other costs of closure.
Private equity houses Affinity Equity Partners, Carlyle Group and CVC Capital Partners are understood to be among the preliminary bidders for Tesco's South Korean business, Reuters reports. The news agency, citing a report in the Korea Economic Daily, said MBK Partners, Goldman Sachs Principal Investment Area, TPG and snack maker Orion Corp also are involved in the bidding. The South Korean arm of the UK supermarket chain is expected to fetch around USD6 billion in the sale.
The newly-appointed chief executive of emerging markets-focused bank Standard Chartered is planning to overhaul its structure in order to shift capital and power to new regional hubs amid a push to turnaround the bank's performance and to meet new regulatory demands, the Financial Times reported Tuesday. Bill Winters, who took over in May, is understood to be set to simplify and streamline the bank's operations, the FT said, citing people familiar with the situation.
Meanwhile, Nomura upgraded Petrofac to Buy from Neutral, lifting its price target to 1,130 pence from 765p. Citigroup downgraded Admiral Group to Neutral from Sell while Elementis was cut to Neutral from Buy by UBS, and to Neutral from Overweight by JP Morgan.
UK blue-chips Experian, Compass Group and United Utilities Group are joined by mid-caps JD Sports Fashion, Mercantile Investment Trust, Electrocomponents, MITIE Group, TR Property Investment Trust and Paypoint, amongst others, in going ex-dividend Thursday, meaning new buyers no longer qualify for the latest dividend payout.
In the economic calendar Thursday, the UK Confederation of British Industry's distributive trades survey for June released at 1100 BST.
In the afternoon, US jobs data and personal consumption data are scheduled to be published at 1330 BST, while Markit Economics releases its US composite and services purchasing managers' index data for June at 1445 BST. US Energy Information Administration gas storage change information is due at 1530 BST, with the Federal Reserve Bank of Kansas City's quarterly survey of manufacturing activity scheduled shortly after at 1600 BST.
By Daniel Ruiz; danielruiz@alliancenews.com
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