LONDON (Alliance News) - UK stocks are set to open slightly lower Friday as investors continue to mull over Germany's rejection of Greece's loan extension terms on Thursday and ahead of the crucial Eurogroup meeting Friday to discuss the proposal.
On Thursday, Greek Finance Minister Yanis Varoufakis wrote to Eurogroup chief Jeroen Dijsselbloem to formally request a six-month extension to the agreement governing its bailout. It is unclear, however, to what extent Athens is prepared to stick to the associated austerity measures imposed by its international creditors.
"The letter from Athens is not a substantial proposal for a solution," Martin Jaeger, a German Finance Ministry spokesman told dpa, since it "does not correspond" to criteria agreed by eurozone finance ministers earlier this week.
The announcement comes ahead of a meeting of eurozone finance ministers Friday to consider the Greek request.
"The very fact that the eurogroup meeting seems to be taking place, today, might itself be interpreted as a sign of a compromise finally being within reach," say analysts at Lloyds Bank. "Were positive signs to emerge, the market-moving potential of such an occurrence may be limited, beyond a degree of 'risk-on' reaction, given by the essential absence of signs of 'contagion' so far."
IG futures indicate the FTSE 100 to open 5.7 points lower at 6,883.2. The index closed down 0.1% at 6,888.90 Thursday also weighed on by oil shares as Brent oil fell below USD58 a barrel. Ahead of the open Friday, Brent has recovered somewhat to trade at USD60.27 a barrel.
Wall Street ended mixed Thursday. The DJIA closed down 0.2%, the S&P 500 ended down 0.1% and the Nasdaq Composite finished up 0.4%.
In Asia on Friday, the Japanese Nikkei 225 closed up 0.4% at 18,332.3 its highest close since May 2000. Hong Kong and Shanghai markets are closed for Chinese New Year.
German producer prices came in below expectations in January causing further pressure on the euro early Friday. Producer prices declined 2.2% year-on-year missing the forecast of a 2.0% drop and December's figure of a 1.7% decline. Month-on-month prices fell 0.6%, a slight improvement on December's 0.7% decline but missing expectations of a 0.4% fall.
The euro dropped sharply against the dollar following the numbers, hitting a low of USD1.1337.
Edinburgh-based Standard Life reported a 19% rise in operating profit before tax from continuing operations in 2014, bolstered by rising assets under administration on the back of net inflows, positive market movements and the acquisition of Ignis Asset Management. In a statement, the group said that operating profit before tax from continuing operations amounted to GBP604 million in 2014.
BP has lost its bid to reduce the maximum civil fine of GBP8.9 billion that the company could face for its role in the 2010 Gulf of Mexico oil spill, the BBC reported. A US judge rejected BP's appeal to pay a cap of USD3,000 per barrel spilt in the Gulf of Mexico, with government prosecutors claiming BP should pay up to USD4,300 per barrel to account for inflation.
In the economic calendar, there are Markit Services, Manufacturing and Composite Purchasing Managers Index readings from France at 0800 GMT, Germany at 0830 GMT and the eurozone at 0900 GMT. UK public sector new borrowing for January is at 0930 GMT as is UK retail sales. US Markit Manufacturing PMI is expected at 1445 GMT.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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