MARKET COMMENT: London Set To Open Lower After ECB Message To Greece

LONDON (Alliance News) - London markets set to open lower Thursday, after the European Central Bank turned up the pressure on Greece over its vow to renegotiate the terms of its bailout.

The ECB said it would refuse to accept Greek government bonds as security for loans. The central bank had previously given the Greek government a waiver on the use of its bonds as security, but said in a statement that it would lift that exemption as of February 11.

"European markets look set for a lower open today after the European Central Bank decided to send a rather sharp message to the Greek government that they were in no mood to accept any renegotiations of their obligations with respect to the current Greek bailout program," says Michael Hewson, chief market analyst at CMC Markets.

Greek finance minister Yanis Varoufakis push to renegotiate the country's bailout faces a tough opponent on Thursday as he holds talks with German Finance Minister Wolfgang Schaeuble.

IG futures indicate the FTSE 100 to open 54 points lower at 6,805.5. The index closed up 0.2% at 6,860.02 on Wednesday, after a slide in the price of oil offset a positive UK economic reading and the decision by China's central bank to cut its reserve ratio for banks.

Wall Street ended flat to lower Wednesday. The DJIA closed flat, the S&P 500 ended down 0.4% and the Nasdaq Composite fell 0.2%.

In Asia on Tuesday, the Japanese Nikkei 225 closed down 1%, and the Hang Seng trades up 0.3%. The Shanghai Composite is trading up 0.1%.

Brent crude is quoted at USD53.42 a barrel Thursday and US benchmark West Texas Intermediate is quoted at USD47.65 a barrel. Gold is sliding at just under the psychologically important USD1,300 level, quoted early Tuesday at USD1,270.92 an ounce.

In the economic calendar, German factory orders are at 0700 GMT followed by Bank Of England interest rate decision at 1200 GMT. In the afternoon, US Initial jobless claims are at 1330 GMT.

In the corporate calendar, Vodafone Group will provide an interim management statement, as will as Compass Group and Enterprise Inns. AstraZeneca and Smith and Nephew will release full year results and EasyJet will publish its January Traffic Statistics.

By Daniel Ruiz; danielruiz@alliancenews.com

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