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LONDON (Alliance News) - London stocks are set to open lower Wednesday, as the market focuses on votes on the Greek debt bailout in several European parliaments, followed by the minutes of the US Federal Open Market Committee after the London market close.
IG says futures indicate the FTSE 100 to open 30 points lower at 6,495.60. The index closed down for sixth consecutive session on Tuesday, slipping 0.4% at 6,526.29.
The German parliament is expected to approve Greece's third bailout in five years, as the Spanish body did on Tuesday. The Dutch parliament also is due to vote Wednesday.
"While the [German] vote is expected to pass, attention will be focussed on how many German MP?s rebel against the motion, with some estimates putting the numbers as high as 100, as uncertainty over the future involvement of the IMF complicates [German Chancellor] Angela Merkel?s efforts to convince the German population," writes CMC Markets chief market analyst Michael Hewson.
Merkel is to meet lawmakers from her Christian Democratic Union and their Bavarian-based allies, the Christian Social Union, ahead of a session on Wednesday of the Bundestag, which owns 631 seats.
"I haven't made it easy for myself," Finance Minister Wolfang Schaeuble said in an interview on German state television on Monday. "I have struggled over this, and I think weighing up all the points of view it is the right decision," said Schaeuble, who took a hardline stance in Greek bailout talks, going so far as suggest Greece temporarily exit the currency bloc.
Wall Street ended lower Tuesday. The DJIA closed down 0.2%, the S&P 500 ended down 0.3% and the Nasdaq Composite finished down 0.6%.
Federal Reserve Chair Janet Yellen has repeatedly said that the US central bank will raise US interest rates later this year, and analysts expect the first US rate hike in nine years to come in the September 16-17 meeting. But before that, the Fed is scheduled to release the minutes from its most recent monetary policy meeting at 1900 BST.
Oanda analyst Craig Erlam believes that the only issue with the minutes at this stage is that events of the past few weeks do mean that they are somewhat outdated. The meeting was held on July 28 and 29.
"The views of the Fed policy makers at the time of the meeting may not necessarily be the same now," writes Erlam. "The main reason for this has been the yuan depreciation in China and the risk that further devaluations could follow as the People?s Bank of China attempts to create a more market-orientated currency."
In Asia on Wednesday, the Japanese Nikkei 225 closed down 1.6%. In China, the Hang Seng is down 0.8% and the Shanghai Composite is down 0.5%.
On the UK corporate front, blue-chip miner Glencore reported a substantial fall in earnings, as expected, in the first half of the year, due to weaker commodities and oil prices and following the company's mixed production results earlier this month.
The multi-commodity miner reported earnings before interest, tax, depreciation, amortisation and exceptional items of USD4.61 billion in the first half of 2015, down 29% from USD6.46 billion a year earlier. Ebit before exceptional items was down 61% to USD1.42 billion from USD3.62 billion, with the fall in earnings mainly caused by the fall in commodity prices.
Car insurer Admiral Group reported a slight fall in pretax profit in the first half, but said it had a "very solid" showing in the UK, where results were helped by positive claims cost developments and small price increases in that key car insurance market. It said it made a GBP181.7 million pretax profit in the six months to the end of June, slightly down on the GBP183.3 million reported in the corresponding period the prior year. Excluding minority interests, pretax profit was up 1% to GBP186.1 million.
Meanwhile, Imperial Tobacco Group said its net revenue was dragged lower by currency effects in the first nine months of its financial year, as a rise in volumes in its growth brands portfolio was offset elsewhere to pull total volumes down.
The FTSE 100-listed tobacco company, which owns Golden Virginia tobacco and Rizla cigarette papers, said tobacco net revenue in the nine months to the end of June was GBP4.44 billion, down from GBP4.63 billion a year earlier. The 4% decline on a reported basis compared to a 2% rise in constant currencies.
UBS lifts Persimmon price target to 2,135p from 2,020p, keeping a Neutral stance, while Goldman Sachs cut Aberdeen Asset Management price target to 383p from 400p, retaining a Neutral rating.
JP Morgan cuts John Wood Group price target to 569p from 577p, reiterating an Underweight recommendation, while the broker raises Regus price target to 280p from 260p, keeping a Neutral stance.
In the economic calendar Wednesday, the eurozone current account is due at 0900 BST. In the US, alongside the FOMC minutes, due at 1900 BST, the US consumer price index and EIA crude oil stocks are expected at 1430 BST and 1530 BST, respectively.
By Daniel Ruiz; danielruiz@alliancenews.com
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