LONDON MARKET COMMENT: Stocks Seen Higher Despite Greek Worries

Tue, 19th May 2015 05:59

LONDON (Alliance News) - UK shares are set to open higher Tuesday, despite the Greek debt issues that continue to worry investors, with inflation numbers due from the UK and the eurozone in focus.

Greece has said it wants to reach a loan deal with its international creditors by the end of this month, BBC reported Monday afternoon, citing government spokesman Gabriel Sakellaridis.

"A deal is required immediately; this is why we are talking about the end of May, to resolve these critical liquidity issues," Sakellaridis said.

Oanda senior market analyst Craig Erlam says negotiations don?t appear to have progressed any further and despite being only two weeks from default, Greek Prime Minister Alexis Tsipras is standing by his red lines.

"Pension and labour market reforms are the key sticking points although the bizarre decision to rehire around 4,000 public sector staff against the wishes of its creditors doesn?t really help matters either," says the analyst.

The latest UK inflation data for April is expected to remain at 0%, unchanged from March, "though it wouldn?t be a surprise to see prices show an annualised fall to -0.1%, in light of last week?s inflation report from the Bank of England, and the fact that compared to a year ago, fuel and food prices are significantly lower," says Michael Hewson, chief market analyst at CMC Markets UK.

UK retail price, producer price and consumer price indices are due at 0930 BST, while the eurozone consumer price index are due at 1000 BST.

IG says futures indicate the FTSE 100 to open 11 points higher at 6,979.3. The index closed up 0.1% at 6,968.87 Monday.

Wall Street also ended higher Monday. The DJIA closed up 0.1% at 18,298.88, having reached a new intraday high at 18,325.54, while the S&P 500 ended up 0.3% at 2,129.2, also having reached a new record high at 2,131.78. The Nasdaq Composite ended up 0.6% at 5,078.43.

In Asia on Tuesday, the Japanese Nikkei 225 trades up 0.9%, and the Hang Seng is up 0.2%. Meanwhile, the Shanghai Composite is trading up 2.4%.

In the corporate calendar Tuesday, Vodafone, Land Securities Group, ICAP, BTG, Aveva Group, and Homeserve release full-year results. Greencore Group, Innovation Group and Paragon Group of Companies, Topps Tiles, Treatt and Big Yellow Group publish half-year results. Chesnara issues an interim management statement.

Also in the corporate calendar, the EU and German ZEW surveys are due at 1000 BST. In the US, the Redbook index is due at 1355 BST.

By Daniel Ruiz; danielruiz@alliancenews.com