LONDON MARKET CLOSE: Stocks Slip As Greek Talks Prove Inconclusive

LONDON (Alliance News) - London's main stock indices closed lower Monday, amid a lack of progress in the Eurogroup meeting to discuss Greece's financial problems, a day before the country's deadline for an International Monetary Fund debt repayment.

The blue-chip FTSE 100 ended down 0.2% at 7,029.85 points, whilst the mid-cap FTSE 250 shed 0.4% to 17,870.64. The AIM All-Share index outperformed, closing the day up 0.8% at 759.20.

European stocks also fell into the red, with the French CAC 40 ending down 1.2% and the German DAX 30 down 0.3%. On Wall Street at the London close, the DJIA and the S&P 500 both were down 0.1%, but the Nasdaq Composite was up 0.1%.

UK, European and US exchanges all had posed gains on Friday following the UK election outcome and US unemployment figures.

Greece is running out of time to reach an agreement on its bailout, eurozone finance ministers warned as they met in Brussels to take stock of Athens' progress in negotiations with its creditors.

"The decision lies with Greece," said German Finance Minister Wolfgang Schaeuble, who met separately with his Greek counterpart, Yanis Varoufakis, ahead of the Eurogroup talks, according to Greek media.

"This is not a ball game," Schaeuble said. "We want to help Greece. But Greece must do its part." Schaeuble also said a Greek referendum on reforms could be the correct measure and let the Greek people decide whether they are prepared to accept what is necessary.

Greece has been trying to access EUR7.2 billion remaining in its bailout programme, but its creditors - the European Commission, the European Central Bank and the IMF - have refused to transfer the money until Athens agrees to new reforms. Greece is due to repay EUR756 million to the IMF on Tuesday, the latest in a series of loan repayments.

Among individual shares on the London Stock Exchange, Royal Mail ended as the best performer in the FTSE 100, up 3.9%, after fellow postal firm Whistl suspended its door-to-door letterbox service, Sky News reported on Monday, putting jobs at risk. The report said that Whistl is trying to control its losses after LDC, the private equity arm of Lloyds Banking Group, withdrew from talks about a possible investment in the company at the end of April.

Shore Capital said Whistl must be finding it difficult to compete with Royal Mail in distribution as the new entrant requires sufficient scale to absorb the high costs of "final mile" delivery.

London-listed miners were among the best performers for most of the day, but their gains eroded as the session wore on. The companies were boosted after the People's Bank of China cut interest rates for the third time in six months on Sunday to try to reverse an economic slowdown. The central bank said on its website it would lower its benchmark lending rate by 25 basis points to 5.1%. The measure took effect on Monday. The bank will also cut its one-year benchmark deposit rates by the same amount to 2.25%.

At the close, Glencore and Anglo American both were up 1.1%, still amongst the best blue-chip performers.

In the FTSE 250, Diploma ended as the biggest faller, down 6.5%. The controls, seals and medical devices company posted a rise in pretax profit for the first half of its financial year, buoyed by acquisitions, and it increased its interim dividend, saying this expressed its confidence in its growth prospects. However, Numis downgraded Diploma to Hold From Add, following a strong share performance that had driven its price above the broker's target of 843 pence. The stock closed at 792.00p.

Spirax-Sarco Engineering, down 4.1%, said its organic revenue was up 4% in the first four months of 2015, and its operating profit also grew, even though exchange rate movements reduced its revenue earned overseas by 1.8% when translated into sterling. The company also said the normal seasonal growth in its order book hadn't been as strong in the early months of this year compared with the strong growth it saw early in 2014.

On AIM, CEB Resources shares jumped 51%. The mining investor said that it is evaluating an investment in oil and gas assets in Indonesia and that there would be an associated fund raising, although there's no guarantee that the deal will go ahead.

The pound rose to its highest level against the dollar so far in 2015, as the Bank of England maintained its key interest rate at record low level of 0.5% and the size of the quantitative easing at GBP375 billion. The central bank publishes its quarterly update on inflation later this week, amid low inflation and signs of a slight slowdown in the UK economy.

"The apparent bottoming of oil prices could have given the two dissenters, Martin Weale and Ian McCafferty, confidence to vote for a rate hike on the prospect of a speedier move back towards the 2% inflation target," said Jasper Lawler, market analyst at CMC Markets.

The pound hit a high of USD1.5590 against the dollar, and at the London close traded at USD1.5581.

In the economic calendar Tuesday, there is UK industrial and manufacturing production figures at 0930 BST, and the National Institute of Economic and Social Research's UK GDP estimate at 1500 BST.

In the UK corporate calendar, information services company Experian reports full-year results, as does equipment rental and plant hire services company Speedy Hire. Budget airline easyJet and pub operator Enterprise Inns report half-year results. There also are interim management statements from Lloyd's of London insurer Hiscox and specialist insurer Just Retirement Group.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

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