2nd Jul 2015 06:33
LONDON (Alliance News) - UK stocks are set to open a touch lower Thursday with the Greek saga continuing to weigh on investor sentiment ahead of the US nonfarm payrolls report later in the afternoon.
The Greek crisis worsened late Wednesday after its creditors and eurozone finance ministers stalled further negotiations with the country until after the outcome of the Sunday referendum and rejected any bailout extension.
In a letter to Greek Prime Minister Alexis Tsipras, Eurogroup President Jeroen Dijsselboem said there are no ground for further talks at this point given the political situation, rejection of the previous proposals, the Sunday referendum, and the Greek government recommendation to vote 'No'.
"There will be no talks in the coming days, either at Eurogroup level or between the Greek authorities and the institutions on proposals or financial arrangements. We will simply await now the outcome of the referendum on Sunday and take into account the outcome of that referendum," Dijsselboem said.
Analysts at Société Générale say that if a third bailout deal was to be made, it would be a lengthy process.
"As the latest polls point to a small margin in favour of a 'Yes', we believe that reaching agreement on a third bailout will be a lengthy process that will take weeks. Also, the referendum will likely be followed by new elections, meaning that euro area policymakers would have to wait for a new Greek government before starting to negotiate. All this suggests that Greece will miss the European Central Bank payment on 20 July," SocGen says.
IG says futures indicate the FTSE 100 to open lower at 6,596.3. The blue-chip index closed up 1.2% at 6,601.59 Wednesday spurred by hopes of a new deal between Greece and its creditors following a letter by Tsipras to Greece's creditors saying Athens is prepared to accept the majority of its creditors' bailout demands.
In New York Wednesday, the DJIA ended up 0.8%, the S&P 500 closed up 0.7% and the Nasdaq Composite ended up 0.5%.
In Asia Thursday, the Nikkei in Tokyo closed up 1.0%, and the Hang Seng in Hong Kong trades up 0.2%. The Shanghai Composite is down 5.0% even after Chinese securities regulator moved to relax collateral rules on margins loans in an attempt to prevent a cycle of price falls and forced selling in the country's stock market, according to the Financial Times.
Persimmon said it traded well in the first half of 2015, with legal completion volumes and revenue both rising, average selling prices higher and its total forward sales value at the end of June up by 15%.
The FTSE 100-listed housebuilder said new home legal completion volumes in the six months to the end of June rose by 7% to 6,855 units, with total revenue rising to GBP1.34 billion from GBP1.20 billion a year earlier. Visitors to its sites in the UK are in line year-on-year and cancellation rates remain low, the company said.
Dixons Carphone said its Connected World Services arm has signed a deal with US mobile carrier Sprint Corp to open and manage a number of Sprint-branded stores in the US. Initially, Dixons Carphone will supply mobile phone retail expertise to Sprint for 20 new stores. If successful, the scheme will then be rolled out further, with plans to open up to 500 stores.
Lloyds Banking Group is continuing its slow return to full private ownership, a stock exchange filing confirmed, with the UK government selling another 1% stake in the FTSE 100 lender. According to the statement, the UK government now owns 15.90% of Lloyds Banking Group, having previously owned 16.87% of the lender's shares.
In the economic calendar, there are UK Halifax house prices at 0800 BST, ahead of the UK construction purchasing managers' index at 0930 BST and eurozone producer price index at 1000 BST. At 1230 BST are the release of the European Central Bank's policy meeting accounts. The focus will be on the US for the rest of the afternoon, with the release of nonfarm payrolls, unemployment and earnings data all at 1330 BST and factory orders at 1500 BST.
UK house prices declined unexpectedly in June, data from the Nationwide Building Society showed. House prices dropped 0.2% month-on-month in June, confounding expectations for a 0.5% rise. This was the first fall in four months and reversed a 0.2% rise in May.
By Neil Thakrar; [email protected]; @NeilThakrar1
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