24th Apr 2015 06:38
LONDON (Alliance News) - London share prices are set to open higher Friday, with investors focusing on the start of the Eurogroup meeting, where difficult discussions over Greek debt are expected to continue, while analysts say optimism in the market about Greece looks premature.
IG says futures indicate the FTSE 100 to open 11 points higher 7,064.50. The index closed up 0.4% at 7,053.67, pushed higher by mining stocks, amid a flurry of economic data from Europe and the US.
"Over in Riga [Latvia], at today?s meeting of European Union finance ministers meeting, expectations of a deal between EU creditors and Greece are virtually nil, with both sides playing down the prospect of any agreement before the end of the month," says Michael Hewson, chief market analyst at CMC Markets UK.
However, Hewson writes that European stock markets point to a higher opening given that "optimism of some form of deal does appear to be slowly trickling back...but it still remains fragile given that the Greek government has to pay salaries and pensions by the end of the month, and has only managed to do so by sequestering funds by decree from local governments, pension funds and other publicly owned bodies, in a move that has caused a great deal of controversy within the country, including amongst some of its own supporters."
Oanda senior market analyst Craig Erlam also thinks optimism may be "quite premature".
"While we were hoping that today?s eurogroup meeting would bring a resolution to reform negotiations between Greece and its creditors and once again kick the can a little further down the road, it?s become quite clear this week that this is very unlikely to be the case and therefore this sage is likely to roll on for a few more weeks yet," Erlam says.
"The next eurogroup meeting will take place on 11 May, a day before Greece has to make further loan repayments. It?s far more likely that a deal will be reached then," Erlam adds.
Wall Street ended higher Thursday. The DJIA closed up 0.1% and the S&P 500 ended up 0.2%. The Nasdaq Composite ended up 0.4%, reaching a new record closing high at 5,056.06, a level it hasn't seen since early 2000.
In Asia on Friday, the Japanese Nikkei 225 closed down 0.8%. In Hong Kong, the Hang Seng trades down 0.2% and the Shanghai Composite is trading down 1.1%.
In London, pharmaceuticals giant AstraZeneca maintained its full-year guidance Friday, as the strong dollar hit its revenue in the first quarter of 2015, and it posted a decline in core earnings per share and operating profit due to continued investment in its pipeline.
AstraZeneca posted a pretax profit of USD678 million, up from USD638 million, as a decline in revenue of 6% to USD6.06 billion from USD6.46 billion was offset by lower cost of sales and other operating income of USD377 million. Revenue growth was hit by the strength of the dollar, and at constant currency revenue rose 1%.
However, at the core level, operating profit was down 4%, mostly as a result of reduced margin and higher investments and research and development costs, as AstraZeneca continued to invest in developing its pipeline and sales and marketing. Core earnings per share fell 7% at actual exchange rates to USD1.08.
Reckitt Benckiser Group reported like-for-like sales growth across the business of 5% on a year earlier, with solid performances in its health and hygiene franchises slightly offset by like-for-like sales declines in its home and portfolio brands businesses.
The FTSE 100-listed consumer goods group, which makes brands ranging from cleaning products such as Cillit Bang to ibuprofen brand Nurofen, said like-for-like net revenue growth in its health business was 13%, with strong growth for its Nurofen, Gaviscon, Strepsils, Durex and Airborne brands and with its consumer health franchise generally boosted by a strong cold and flu season.
Meanhwhile, motor insurer Admiral Group on Friday said it traded in line with expectations in the first quarter and said it has decided it will not issue interim management statements going forward. The company said trading in the first quarter to the end of March was in line with its expectations and said no significant developments have occurred since it published its 2014 results in March.
Defence and aerospace group BAE Systems on Friday said it has started a review of part of its US Intelligence and Security business after seeing a number of expressions of interest in the unit. FTSE 100-listed BAE said its manpower and services businesses within the US Intelligence and Security arm, which spans technical, mission and IT support services and which predominantly serves the US government, has generated external interest and a number of enquiries. As a result, BAE has hired external adviser to back a strategic review of the business.
Publisher Pearson reiterated its full-year earnings guidance as the strong US dollar helped boost sales in the first quarter of 2015, and Chairman Glen Moreno announced his intention to step down in the next year.
Still in the economic calendar, the German IFO business climate index is due at 0900 BST. In the US, Durable goods data is at 1330 BST.
By Daniel Ruiz; [email protected]
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