25th Jun 2015 15:52
LONDON (Alliance News) - The FTSE 100 ended a run of five straight sessions of gains Thursday, as optimism for a deal between Greece and its creditors was reined in, with negotiations concluding with no progress.
Earlier in the day, Greek Prime Minister Alexis Tsipras met the chiefs of the country's creditors - the European Commission, the European Central Bank and the International Monetary Fund - at the commission's headquarters in Brussels.
Tsipras was said to have stuck to Greece's initial revised plan, which was submitted on Monday and which was initially welcomed positively by the creditors, who said it would form the basis for further discussions. However, crucial talks between both sides on Thursday failed to reach an agreement, after the Greek prime minister had on Wednesday rejected the institutions' revised plan. Nevertheless, European Council President Donald Tusk said he sees the Greek story having a "happy ending".
"For now, I can only say, that work is underway and for sure it will need still many hours," Tusk said ahead of a European Council meeting in Brussels. "The last hours have been critical but I have a good hunch that unlike in Sophocles' tragedies this Greek story will have a happy end."
A meeting of eurozone finance ministers also ended Thursday without any breakthrough, and another meeting was scheduled for Saturday. European Commission President Jean-Claude Juncker vowed to "work until the last minute, second, millisecond so that the euro project does not crash."
The FTSE 100 closed down 0.5% at 6,807.82 points, while the FTSE 250 ended up 0.1% at 17,944.88 and the AIM All-Share closed 0.2% higher at 772.18.
European indices also ended lower, with the CAC 40 in Paris ending down 0.1%, and the DAX 30 in Frankfurt ending flat.
At the European close, US stock indices were managing to post gains following some strong economic data. The DJIA and S&P 500 were up 0.2% and the Nasdaq Composite up 0.3%.
Personal spending in the US rose by more than expected in May, the Commerce Department revealed, with spending seeing its strongest growth in nearly six years. The report said personal spending jumped by 0.9% in May following a revised 0.1% uptick in April. Spending had been expected to increase by 0.7% after originally being reported as nearly flat in the previous month. The stronger-than-expected spending growth reflected the largest increase since a 1.0% jump in spending in August of 2009.
"We are finally seeing signs of consumers beginning to spend the gasoline savings they have been sitting on since the start of this year," said Paul Ashworth, chief US economist at Capital Economics. "Moreover, spending is also being driven by a rapidly improving labour market."
On the UK corporate front, Sage Group ended as the biggest gainer in the FTSE 100, up 3.9%, rebounding from Wednesday when it ended as the worst blue-chip performer, falling 6.0%. Nevertheless, analysts from Societe Generale and Barclays both were disappointed with the targets outlined in the software company's capital markets day, held on Wednesday.
Ex-dividend companies weighed on London's main stock indices Thursday, with United Utilities Group, down 3.7%, and Compass Group, down 1.7%, amongst the worst blue-chip performers, and Electrocomponents, down 2.6%, and MITIE Group, down 2.4%, amongst the biggest mid-cap fallers.
Packaging and recycling company DS Smith said its pretax profit rose in its financial year to the end of April as the company improved its margins sufficiently to offset a fall in revenue resulting from the weakness of the euro. The group also said it has spent EUR190 million to acquire a new corrugated packaging business in Spain.
Pretax profit for the company was up to GBP200 million in the year compared to GBP167 million a year earlier. Revenue was down to GBP3.82 billion from GBP4.04 billion, but this was offset by a lower cost of sales which improved its operating margin in the year. Revenue for the company was pushed lower by the weakness of the euro against sterling over the period, with revenue at constant currencies rising by 1%. The company's shares closed up 2.5%.
Independent Resources ended as the worst performer in the AIM All-Share index, down 33%, after the company reported a frustrating year in 2014 trying, and failing, to acquire an interest in a producing asset, but revealed a narrower pretax loss.
Also on AIM, Trap Oil Group ended down 30%. The company failed to find hydrocarbons at the Niobe exploration well in the UK North Sea, and warned it will need to raise further cash as its bank balance dwindles after reaching a settlement deal with its two main creditors. The drilling of the Niobe exploration well has fulfilled the license obligation, but as it failed to find any hydrocarbons, will be plugged and abandoned.
In the economic calendar for Friday, there are Japanese inflation and unemployment data at 0030 BST, consumer confidence data from France at 0745 BST, eurozone private loans data at 0900 BST and the US Reuters/Michigan Consumer Sentiment Index at 1500 BST. Bank of England Governor Mark Carney will make a speech at the Inclusive Capitalism Annual conference in London at 1545 BST.
In the UK corporate calendar are a first-quarter interim management statement from Tesco, a trading update from media company Trinity Mirror, and full-year results from collectibles company Stanley Gibbons.
By Neil Thakrar; [email protected]; @NeilThakrar1
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