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LONDON (Alliance News) - London stock indices are trading mixed mid-morning Wednesday as fears about Greece's finances continue amid a busy day on the UK corporate front, which has seen Burberry Group shares slump after it lowered profit guidance for its current financial year.
The FTSE 100 trades slightly higher at 6,997.10. The FTSE 250 trades down 0.2% at 18,139.01, and the AIM All-Share is flat at 762.52.
In Europe, the French CAC 40 is down 0.4% and the German DAX 30 is down 0.5%.
Greece's financial worries continue to damp investor spirits after the Greek government's parliamentary speaker said the struggling nation will not be able to make a payment to the International Monetary Fund on June 5 if there is no deal with its creditors by then, Reuters reported.
"Now is the moment that negotiations are coming to a head. Now is the moment of truth, on June 5," Nikos Filis told ANT1 television. "If there is no deal by then that will address the current funding problem, they won't get any money."
Filis' comments come after a number of media outlets reported on Monday that Greek Prime Minster Alexis Tsipras wrote to IMF chief Christine Lagarde warning that last week's EUR750 million repayment to the IMF would be missed unless the European Central Bank immediately raised its curbs on Greece's ability to issue short-term debt.
The European Central Bank's Governing Council will meet on Wednesday to discuss whether to raise the collateral requirements for the emergency loans it gives to the Bank of Greece. The 25-member council, led by ECB President Mario Draghi, is set to meet in Frankfurt to decide whether to tighten the rules for the Emergency Liquidity Assistance for Greece. However, analysts expect ECB policymakers to not take any decision that could trigger a crisis.
On the London Stock Exchange, Burberry Group is the worst performer in the FTSE 100, down 4.5%. The luxury fashion retailer lowered its profit guidance for its current financial year due to movements in foreign exchange rates and said it is seeing "increased uncertainty" in some markets.
It said it expects profit in the current financial year to be around GBP10 million higher than in its recently completed financial year, if exchange rates remain at current levels and it continues to be hit by currency fluctuations. That is GBP40 million lower than the guidance it gave in its trading update in April.
Hargreaves Lansdown trades down 3.7%, even though it reported an increase in assets under administration in the opening four months of 2015, bolstered by net inflows of GBP2.75 billion in a period including the crucial end of the tax year in the UK.
However, Shore Capital analyst Paul McGinnis notes that in the first-half, net revenue grew by 1.3%, year-on-year, while for the 10 months to end of April net revenue was GBP241 million, which is up 0.7% on the same period last year. The growth is much lower than Shore's 4% full-year net revenue growth estimate, which it will review.
Vodafone Group is the best performer in the FTSE 100, trading up 3.7% as merger and acquisition rumours support telecommunication stocks.
"The world's second largest mobile operator Vodafone has been on our watch list for some time and with fellow UK companies Sky and BT already having found their complementary partners in Spain's Telefonica and the UK's EE, a vicious price war may soon see Vodafone's fast ageing business model causing it to lag the competition," says Augustin Eden, a research analyst at Accendo Markets.
TalkTalk Telecom Group trades up 1.4%.
Marks and Spencer Group is up 1.8%, as it reported growth in profit in its recently-ended financial year, although it was lower than the market consensus figures the retailer provided, as UK sales increased but international sales declined. The clothing and food retailer reported a pretax profit for the year ended March 28 of GBP600.0 million, up 3.4% from the GBP580.4 million reported the year before.
In the FTSE 250, Intermediate Capital Group is the best performer, up 5.9%, after it said it is to return GBP300 million in capital to shareholders through a special dividend and as it reported higher assets under management and profit over its last financial year.
In a statement, the specialist asset manager said it made a GBP178.5 million pretax profit in the year ended March 31, compared with GBP164.4 million in the prior year. Assets under management increased to EUR18.0 billion from EUR12.98 billion as fundraising inflows more than offset the outflows from realisations.
Allied Minds, down 6.2%, is the worst midcap performer after Invesco Asset Management confirmed that it sold more shares than expected in the science and technology development and commercialisation company.
Invesco Asset Management said on Tuesday it intended to sell 13 million shares in Allied Minds, but on Wednesday said it has sold 16 million shares in the company at 565 pence per share, raising GBP90.4 million. Allied Minds shares currently trade at 610.00p.
Britvic, down 4.2%, said its pretax profit improved in the first half of its financial year despite a fall in revenue following an improvement in its gross margin, and the group hiked its dividend on the back of a confident outlook for the year.
However, volumes decline by 0.3% in the half, with Britvic's GB stills and International volumes both struggling but partially offset by a solid performance in Ireland, a marginal increase in France and a flat performance for GB carbonates.
Bank of England policymakers unanimously voted to maintain their monetary policy stance at the meeting held early this month, the minutes of the meeting showed. The Monetary Policy Committee voted 9-0 to hold the key interest rate at a record low of 0.50% and asset purchase programme at GBP 375 billion.
For two members, the immediate policy decision remained finely balanced between voting to hold or raise the bank rate.
The pound pushed higher against the dollar following the release and currently trades at USD1.5509.
Still ahead in the economic calendar is US MBA mortgage applications at 1200 BST and US EIA crude oil stocks at 1530 BST. After the London close, the Federal Reserve's Federal Open Market Committee meeting minutes will be released at 1900 BST.
US stock futures point to a mixed open with the DJIA and S&P 500 both indicated fractionally lower, while the Nasdaq 100 is expected to open a touch higher.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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