16th Jun 2015 06:31
LONDON (Alliance News) - London share prices are set to open lower Tuesday, with the market focused again on the Greek debt negotiations but also on UK inflation data due at 0930 BST, as hotel and coffee shop chain operator Whitbread reported higher sales.
IG says futures indicate the FTSE 100 to open 11 point lower at 6,699.50 points. The index closed Monday down 1.1% at 6,710.52 points.
"UK inflation figures are expected to show that the foray into negative territory last month was temporary, resulting in part from volatility in airfares because of the shift in the timing of Easter relative to last year," says Lloyds Bank in a report.
"As such, we look for annual CPI inflation to rise from -0.1% to 0.1% in May as this effect unwinds, helped also by indications that supermarket discounting has not intensified and higher fuel forecourt prices. In fact, we believe inflation will trend higher over the next few months and could be just above 1% by the end of the year, with further rises in store in 2016," says Lloyds.
Meanwhile, German consumer price index came in as expected. Month-on-month, German inflation was 0.1% in May, the same figure as in April, while year-on-year inflation came in at 0.7%.
According to Lloyds, the German ZEW survey of economic sentiment, due at 1000 BST, is expected to show a further decline in investor confidence in June.
Greek Prime Minister Alexis Tsipras on Monday urged the country's creditors to get "realistic", a day after weekend negotiations failed to bridge major differences, setting the stage for eurozone finance ministers to make a final push to reach a deal to avert a default.
Tsipras accused the institutions involved in the country's bailout negotiations of "political expediency" regarding their insistence on pension cuts. He said: "We do not have the right to bury European democracy at the place where it was born."
The European Central Bank joined Germany on Monday in insisting that the onus to resolve the Greek debt crisis now rests with Athens, as fears that Greece could eventually crash out of the eurozone triggered a new sell-off in equity markets.
"While all actors will now need to go the extra mile, the ball lies squarely in the camp of the Greek government to take the necessary steps," ECB President Mario Draghi told a hearing of the European Parliament in Brussels.
In Asia on Tuesday, the Japanese Nikkei 225 closed down 0.5%. Meanwhile, the Hang Seng trades down 0.6% and the Shanghai Composite is trading down 2.2%.
On Wall Street, stocks closed firmly in the red on Monday. Apart from Greece, negative sentiment also was resulted from some disappointing US economic data, including a report from the Federal Reserve showing an unexpected drop in industrial production in May.
The DJIA closed down 0.6%, the S&P 500 ended down 0.5%% and the Nasdaq Composite finished down 0.4%.
In the corporate front, Whitbread early Tuesday reported a rise in total revenue in the first quarter of its financial year as it continued to grow sales at both its Premier Inn and Costa Coffee chains.
The hotel and coffee shop chain operator reported a 12.5% rise in total sales in the 13 weeks to May 28, with Premier Inn revenue up 14.3% and Costa Coffee up 17.2%. On a like-for-like basis, sales grew 6.3% and 5.0%, respectively.
In the economic calendar, UK retail price index and producer price indexes are due at 0930 BST. In the US, housing starts data are due at 1330 BST, while the Redbook index is due at 1355 BST.
By Daniel Ruiz; [email protected]
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