LONDON MORNING BRIEFING: Shares Lower Amid Greece Deal Pessimism

LONDON (Alliance News) - Shares have opened mostly lower in London Friday, as confidence in a deal emerging from the Greek debt negotiations took a hit late Thursday.

The IMF's technical team has left the negotiations in Brussels and returned to Washington, with the sides "well away from an agreement," spokesman Gerry Rice said late Thursday.

Shares in Royal Mail lead blue-chip gainers, up 1.2%, recouping some of their losses on Thursday from the sale of a further 15% stake in the postal firm by the UK government. JPMorgan also Friday raised the stock to Overweight from Neutral.

In the FTSE 250, Bwin.Party and Petra Diamonds are the biggest losers, both down 9.5%. Two shareholders in Bwin.Party are looking to sell 50 million shares in the online gambling company, and Petra Diamonds said it expects to report lower revenue when it next reports annual results, as average prices for selling its diamonds have come under pressure.

Ted Baker shares are up 2.7% after providing a confident trading update.

Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.4% at 6,816.55
FTSE 250: down 0.5% at 18,005.19
AIM ALL-SHARE: up 0.2% at 774.79
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Hang Seng: up 1.2% at 27,231.36
Nikkei 225: closed up 0.1% at 20,407.08
DJIA: closed up 0.2% at 18,039.37
S&P 500: closed up 0.2% at 2,108.86
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GBP: flat at USD1.5510
EUR: flat at USD1.1241

GOLD: up at USD1,183.66 per ounce
OIL (Brent): down at USD64.72 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
(all times in BST)

10:00 EU Industrial Production
13:30 US Producer Price Index
15:00 US Reuters/Michigan Consumer Sentiment Index Preliminary
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The EU and the International Monetary Fund upped the pressure on Greece to accede to their demands after months of unsuccessful bailout negotiations coloured by reluctant signals from Athens on budgetary targets. The IMF's technical team has left the negotiations in Brussels and returned to Washington, with the sides "well away from an agreement," spokesman Gerry Rice said late Thursday. The European Commission and the European Central Bank are also creditors taking part in the talks. "The IMF never leaves the table. We remain engaged, but the ball is very much in Greece's court right now," Rice said. "There are major differences between us in most key areas. There has been no progress in narrowing these differences recently."
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Germany's wholesale prices continued to decline in May, but at a slower pace than in the prior month, figures from Destatis showed. Wholesale prices fell 0.4% year-over-year in May, following a 0.9% decrease in April. The measure has been falling since July 2013. The annual decline was largely driven by a 8.8% fall in the wholesale prices of solid fuels and related products.
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Japan's industrial production climbed more than initially estimated in April, latest figures from the Ministry of Economy, Trade and Industry showed. Industrial production rose a seasonally adjusted 1.2% month-over-month in April, revised up from a 1.0% gain in the flash data. It was the first increase in three months. In March, production had fallen 0.8%.
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Fast-track trade authority, which would clear the way for an up-or-down vote on a trade deal between the US and 11 other Pacific Rim countries, is expected to come up for a vote Friday in the US House of Representatives. Republican leaders of the lower chamber of Congress scheduled the vote after weeks of wrangling as President Barack Obama scrambled to persuade enough fellow Democrats to support it. The fast-track trade measure cleared he Senate last month, with 14 Democrats joining 48 Republicans to get it through the 100-member body. But Democratic support has proved more difficult to find in the House.
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Andreas Lubitz, the Germanwings co-pilot who intentionally flew a crowded passenger jet into a French mountainside in March, feared he was losing his eyesight, which would mean he would have become jobless, according to French investigators. Suffering from a raft of ailments that apparently had no physical cause, Lubitz had been to seven medical appointments - including with psychiatrists - in the month before the crash, investigators said. Even while some of Lubitz's doctors said he was unfit to fly, Robin said that under German privacy laws they were not able to disclose personal medical details to his employer. Due to the medical laws, Robin added that there is currently insufficient evidence to open negligence proceedings against either Germanwings or its parent company, Lufthansa.
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The confirmed death toll from landslides in Nepal's north-eastern district of Taplejung rose to 21, police said. Landslides hit at least six villages in the west of the district after heavy monsoon rain fell Wednesday night on ground destabilized by earthquakes in April and May. Taplejung District Office said 37 more people were feared buried. Some villagers were moved to safer locations.
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BROKER RATING CHANGES
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JPMORGAN RAISES ROYAL MAIL TO 'OVERWEIGHT' ('NEUTRAL') - TARGET 605 (515) PENCE
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BERNSTEIN CUTS UNITED UTILITIES TO 'MARKET-PERFORM' ('OUTPERFORM')
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BERNSTEIN CUTS SEVERN TRENT TO 'MARKET-PERFORM' ('OUTPERFORM')
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NOMURA CUTS CARD FACTORY TO 'NEUTRAL' ('BUY') - TARGET 315 (300) PENCE
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UBS RAISES PETROFAC TO 'BUY' ('NEUTRAL')
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COMPANIES - FTSE 100
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UK telecoms regulator Ofcom proposed controls on the wholesale prices BT Group charges for its business lines, with the aim of reducing costs over a three-year period. Ofcom believes the proposed price caps "should lead to significant real-terms price reductions for most customers" in this market, including businesses, schools, universities and libraries. Consumer mobile and broadband operators also would see savings which could be passed on to customers, Ofcom said.
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GlaxoSmithKline said the Pulmonary Allergy Drugs Advisory Committee of the US Food and Drug Administration voted unanimously that efficacy and safety data for mepolizumab supported its approval for adults aged 18 or older with severe asthma. The committee voted against approval of mepolizumab for use in adolescents aged between 12 and 17 with severe asthma. It voted that the efficacy and safety of mepolizumab had not been adequately demonstrated for this age group mostly due to the limited number of patients in the age group in the overall database. It recommended further data is needed in this group.
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Royal Dutch Shell has notified Ukraine that it will pull out of a shale gas exploration project in the east of the country, the Financial Times reported, as a result of the ongoing conflict in the region. Insiders cited heightened geopolitical risk and sharp drop in global oil prices, which has made shale gas exploration projects less attractive, the report said.
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COMPANIES - FTSE 250
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Fashion retailer Ted Baker said it is on track to meet expectations for its full year to January 31, 2016, following a strong start, with revenue up 24.2% in the eighteen weeks from the beginning of February to June 6. Retail sales during the period were up 18.9%, or 18.1% at constant currency, the company said. E-commerce sales rose 46.9%, driven by further growth in the UK and a strong performance from Ted Baker's US site, as well as a contribution from its new Canadian site launched at the end of 2014.
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Petra Diamonds said it expects to report lower revenue when it next reports annual results, as average prices for selling its diamonds have come under pressure. The diamond producer said that a "lower incidence" of high quality stones, together with higher volumes of smaller diamonds, has put pressure on the average prices it has attracted for its gems. The company expects revenue for the year ending June 30 to amount to about USD430 million, compared with USD471.8 million in the year that ended June 30, 2014. Petra Diamonds' production target of about 3.2 million carats for the year ending June 30 remains intact.
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Bwin.Party Digital Entertainment said takeover proposals for the company will be unaffected as two shareholders look to sell 50 million shares in the online gambling company. In a statement, bwin.party said it has "become aware" that the independent trustees of both Emerald Bay and Stinson Ridge have decided to sell up to 50 million shares in the company through a placing. Chairman Philip Yea said the news gives clarity to the market about a big block of shares due to be sold. Various suitors have been circling bwin.party as a potential takeover. 888 Holdings is one of the companies vying for the company, while AIM-listed GVC Holdings's interest is backed by Canadian gaming and gambling company Amaya.
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Shipping services company Clarkson said Chief Financial Officer Jeff Woyda has been appointed to the role of chief operating officer as well.
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Real estate investment trust Segro announced that it has exchanged contracts with M&G Real Estate to dissolve the Heathrow Big Box Industrial and Distribution Fund or HBB ahead of its termination date in June 2016. HBB was formed as a 50/50 joint venture between Brixton and M&G Real Estate in 2004 to own two assets in the vicinity of Heathrow Airport: Axis Park and Heathrow Corporate Park. SEGRO acquired the interest as part of its takeover of Brixton in 2009. As per terms of the agreement, SEGRO said it will take full ownership of Axis Park which is valued at GBP144.9 million, while M&G Real Estate will take full ownership of Heathrow Corporate Park at a value of GBP118.7 million. In addition, SEGRO will sell HCH House in Poyle to M&G Real Estate for GBP15.0 million. All three assets will be sold at prices in line with December 2014 book values.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Women's fashion retailer Bonmarché Holdings expressed confidence in its growth strategy as it posted a 55% rise in pretax profit for its recently ended financial year. For the 52 weeks to March 28, the company posted a pretax profit of GBP12.4 million, up from GBP8.0 million in the 52 weeks to March 29 2014, as revenue rose to GBP178.6 million from GBP164.3 million. Bonmarché said that it had seen a strong performance in the first half, supported by good weather, whilst the second half of the year was more challenging. Bonmarché proposed a final dividend of 4.5 pence, taking its total dividend for the year to 6.8 pence.
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Alba Mineral Resources said it has raised GBP355,000 through the placing of 71 million shares at a price of 0.50 pence each. Alba Minerals plans to use the proceeds of the placing to satisfy its commitments to existing projects, to evaluation new project opportunities and for general working capital purposes.
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COMPANIES - INTERNATIONAL
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Rupert Murdoch is set to hand down control of 21st Century Fox to his son James Murdoch, with his other son Lachlan Murdoch to become co-chairman of the company. Rupert Murdoch will remain as executive chairman, the Financial Times reports.
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Twitter chief executive Dick Costolo is stepping down, effective July 1, the company said. Twitter co-founder Jack Dorsey has been named interim chief. Costolo will continue to serve as chief executive of Square, Inc, the company he co-founded in 2009. Costola has been chief executive of Twitter since 2010.
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Staples said it received clearance from the Ministry of Commerce of the People's Republic of China for its acquisition of Office Depot. Staples said it continues to seek clearance from regulatory agencies in the US, the EU, Canada, and Australia for the deal. In February, Staples agreed to buy Office Depot in a cash and stock deal. The transaction valued Office Depot at an equity value of USD6.3 billion.
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The European Commission has opened a formal antitrust investigation into certain business practices by Amazon in the distribution of electronic books. The Commission will particularly investigate some clauses included in Amazon's contracts with publishers. These clauses require publishers to inform Amazon about more favourable or alternative terms offered to Amazon's competitors and/or offer Amazon similar terms and conditions than to its competitors. The Commission is concerned that such clauses may make it more difficult for other e-book distributors to compete with Amazon by developing new and innovative products and services.
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Friday's Scheduled AGMs/EGMs

Baker Steel Resources
Tex Holdings
Ted Baker
Tekcapital
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite

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