2nd Jun 2015 06:30
LONDON (Alliance News) - The FTSE 100 has reversed expectations for a higher open and is now pointed lower Tuesday ahead of inflation data from the eurozone and with the focus likely to continue to be on Greek debt negotiations.
German Chancellor Angela Merkel and French President Francois Hollande met in Berlin on Monday as the negotiations over the Greek debt crisis hang in the balance, ahead of the country's deadline for an International Monetary Fund debt repayment on Friday.
The working dinner between the French and German leaders was officially called to consider steps to forge a single digital market in Europe as well to co-ordinate the development of new energy policy across the region and steps to boost youth employment. The meeting in Berlin also was attended by the President of the European Commission Jean-Claude Juncker as well Benoit Potier, who heads up the so-called European Round Table of top industrialists.
The leaders did not comment on the stand-off between cash-strapped Greece and its creditors. However, Greece could form part of the talks in Berlin, German government spokesman Steffen Seibert said on Monday but insisted that it would not be the meeting's main theme.
"Reports last night were doing the rounds of a high-level meeting to thrash out the framework of a deal between IMF chief Christine Lagarde, ECB President Mario Draghi, EU President Juncker and German Chancellor Angela Merkel in Berlin, as speculation grew that a Greece default was a matter of days away," says Michael Hewson, chief market analyst at CMC Markets.
"It's unclear what could be achieved at such a meeting given that no-one from the Greek government was present, and given the divisions that still remain between the parties, which suggests any proposal could well take the form of an ultimatum," Hewson adds.
Futures according to IG point the FTSE 100 to open lower at 6,948.5. The index ended down 0.4% at 6,953.58, on Monday in response to contrasting economic data from the world's two largest economies, the US and China, while a report showed the UK manufacturing sector also grew by less than expected.
On Wall Street Monday, the DJIA and the S&P 500 both closed up 0.2%, and the Nasdaq Composite ended up 0.3%.
In Asia on Tuesday the Japanese Nikkei closed down 0.1%, the Hang Seng trades down 0.6% and the Shanghai Composite is up 0.5%.
British Land said it has launched a GBP350 million offering of senior, unsecured convertible bonds due 2020, money it will use to fund the recently announced GBP210 million acquisition of One Sheldon Square, Paddington Central and the GBP135 million acquisition of Surrey Quays Leisure Park, Canada Water, as well as committed development spending.
Wolseley said it expects to meet analysts' expectations for its trading profit in the current financial year after reporting strong growth in the third quarter of the year, driven by like-for-like sales growth, acquisitions, and an exchange rate boost.
The building products company reported a trading profit from ongoing businesses of GBP195 million for the three months to April 30, up 29% from GBP151 million a year earlier, as revenue grew 16.6% to GBP3.30 billion from GBP2.83 billion and the company improved its gross margins. The revenue increase if exchange rates had remained constant over the year would have been 12.4%, while the currency movements buoyed trading profit by GBP11 million.
Premier Oil said it will consolidate production at the Solan field in the UK North Sea as it takes full ownership of the project after acquiring the 40% stake in the project it did not already own.
The FTSE 250-listed company has acquired Chyrsaor's 40% stake in the field for no upfront consideration. In return, Premier will pay Chyrsaor a payment of up to USD3 million per year and royalty payments of up to USD100 million, after allowing the repayment of the USD530 million plus interest of the outstanding loan provided by Premier to Chyrsaor.
Amec Foster Wheeler warned its scope revenue will be "modestly" lower in 2015 than in 2014 and that its trading margin will suffer a "further modest reduction" compared to its previous guidance, as challenging conditions in the upstream oil and gas industry continues.
The FTSE 250-listed oil services company also said its expects trading profit to be more second half weighted than in 2014.
Elsewhere in the UK corporate calendar, there were full-year results from LondonMetric Property, Synergy Health and AO World.
In the economic calendar, German unemployment data is at 0855 BST, UK net lending and mortgage approvals is at 0930 BST as is UK construction purchasing managers' index. Later in the morning is preliminary eurozone inflation data at 1000 BST, with the consumer price index expected to rise by 0.2% year-on-year in May from flat in April. US factory orders is at 1500 BST.
By Neil Thakrar; [email protected]; @NeilThakrar1
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