LONDON MARKET MIDDAY: Wall Street Seen Down Ahead Of FOMC Minutes

LONDON (Alliance News) - London share prices are mixed Wednesday midday, while Wall Street is called for a lower open as Greece's debt situation and the heavy declines in the Chinese stock markets hit investor's risk appetite.

The FTSE 100 trades up 0.7% at 6,479.33, the FTSE 250 is up 0.1% at 17,231.03 and the AIM All-Share index is down 0.4% at 746.97. In Europe, the CAC 40 in Paris is trading up 0.7% and the DAX 30 in Frankfurt is up 0.3%.

US futures point to a lower open, with the DJIA and the S&P 500 pointed down 0.8% and the Nasdaq 100 seen down 0.9%.

US earnings season starts Wednesday with aluminium producer Alcoa reporting 2015 second quarter earnings, while there are earnings also expected from PepsiCo and Walgreens Boots Alliance on Thursday.

But outside the corporate front, US investors will also have an eye on the release of the minutes from the June Federal Open Market Committee meeting, due at 1900 BST. Also ahead in the economic calendar, US EIA Crude Oil stocks is due at 1530 BST.

"The last statement erred on the dovish side with no inferences that September will see the first rate hike," says CMC Markets analyst Jasper Lawler. "There is a possibility that the minutes will counteract that dovishness with more specific talk about whether the [US] Federal Reserve will reinvest expiring bonds in its balance sheet, or reference to the pickup in inflation."

"More likely though, given the weakness in economic data leading up to the last meeting, there may be discussions of the impact of international developments, ie Greece and China, and the stronger dollar on the US economy," writes the analyst.

Greece's debt problems remains a cause for concern as eurozone leaders set Sunday to be the final deadline for the crisis struck country to submit a new plan for financial assistance. At a press conference on Tuesday, European Council President Donald Tusk said the final deadline for Greece will end this week. "The stark reality is that we have only five days left."

"Until now, I have avoided talking about deadlines. But tonight I have to say loud and clear that the final deadline ends this week," Tusk added. The 28 heads of state or government of the EU will meet on July 12 to reach a final agreement.

Greek Prime Minister Alexis Tsipras said Wednesday Athens is working to flesh out a proposal submitted Tuesday at a eurozone summit. He expresses confidence that "in the next few days, we will be able to meet the obligations of this crucial time in the best interest of Greece and also of the eurozone," pointing to Athens' promise to "bring forward concrete proposals in detail."

In Asia, the Japanese Nikkei ended down 3.1%, while the Hang Seng closed down 5.8% and the Shanghai Composite fell 5.9%. Around half of China's roughly 2,800 listed firms announced trading halts as increasing signs of deleveraging drove down stocks across the board. New measures by the Chinese central bank have so far failed to arrest the recent decline in Chinese stock prices.

"Confidence in the local Chinese equity market has been shattered and is unlikely to come back to previous levels any time soon. To stop trading is serious and from investors the most-hated market intervention," says Heinz Rüttimann, strategy research analyst, at Julius Baer.

The sharp falls in Asian equity markets have hit London-listed stocks with exposure to the region. Standard Chartered, which earlier this month announced the launch of its SC China Value Index, is the biggest decliner in the FTSE 100, down 1.8%. Meanwhile, HSBC Holdings is also amongst the worst blue-chip performers, down 0.8%. Fidelity China Specialist Situations is the biggest faller in the FTSE 250 by some distance, trading down 8.9%.

Concerns about China had led to panic selling in metals markets on Tuesday, but FTSE 100 miners are bouncing back from their falls. Glencore, which hit an all-time low on Tuesday, trades up 3.6% and Anglo American is up 2.0%.

Meanwhile, Barclays is one of the biggest gainers in the FTSE 100, up 2.2%. The bank is looking for a new chief executive to focus the FTSE 100 banking group's efforts on generating returns for shareholders, with the board calling time on Antony Jenkins' leadership and appointing Chairman John McFarlane in an executive capacity until a successor is found.

In the AIM All-Share index, Beowulf Mining is up 23%. The miner welcomed some supportive findings by the County Administrative Board for Norbotten County in Sweden regarding the company's Kallak North iron ore project in the area. Beowulf said the board found that mining is "economically relevant" and said the Kallak North site will generate economic benefits on local, regional and national levels.

Independent Oil & Gas is up 15%. The oil company said it is moving closer to securing financing to bring its North Sea assets into production. It said it is now close to securing a long-term financing deal which will be split between equity and debt funding. The unnamed potential funder of the company, which Independent described as "an internationally listed group with a multi-billion dollar market capitalisation", is expected to subscribe for 30 million shares in the company at 23.79 pence per share, raising approximately GBP7.1 million for the company.

Meanwhile, Kennedy Ventures is down 20% at 5.78p. The company raised GBP1.4 million via a share placing to back the Tantalite Valley Mine in Namibia. It holds a 75% stake in African Tantalum, which owns the Tantalite Valley Mine, and is seeking to raise funds to bring the mine back into production. Kennedy is issuing 26.7 million shares at 5.25 pence, a discount to its current share price.

The UK Budget will be outlined by Chancellor George Osborne at 1230 BST. Osborne is set to include a pledge to re-examine the banking levy, a crackdown on non-domiciles, and a relaxation of Sunday trading hours, along with controversial plans to slash around GBP12 billion from the UK's welfare budget and a populist move to raise the inheritance tax threshold.

Osborne is understood to have rebuffed calls from senior Conservatives to cut the top rate of income tax in the UK to 40% from 45%, the Financial Times reported.

By Daniel Ruiz; danielruiz@alliancenews.com

Copyright 2015 Alliance News Limited. All Rights Reserved.