31st Jul 2015 06:35
LONDON (Alliance News) - The FTSE 100 is called to open slightly higher Friday, continuing its positive run after three consecutive sessions of gains, with the corporate calendar lighter than in previous days this week and despite renewed concerns about Greece.
IG says futures indicate the FTSE 100 to open higher at 6,674.5. The index closed up 0.6% at 6,668.87 on Thursday, driven by company updates from a number of heavily weighted stocks, but the market was knocked back a bit in late trade after the Financial Times reported that the International Monetary Fund has been told it cannot join the Greek debt bailout.
The board of the IMF has been told that Greece's high debt levels and poor record of implementing reforms disqualify the country from receiving a third bailout from the international lender, raising new questions about whether it will join the latest financial rescue for Greece being put together by eurozone creditors, the Financial Times reported.
The FT said members of the IMF board were told this during a meeting on Wednesday, and the determination means that, while the IMF will participate in the bailout negotiations currently ongoing in Athens, it will not decide whether to agree to a new programme for months and potentially into next year, the newspaper said.
That delay could have significant repercussions, particularly in Germany, where officials have long claimed it would be impossible to secure approval from the Bundestag for the new EUR86 billion bailout package without the IMF being on board.
A Greek Finance Ministry official denied the report, saying the IMF would participate in the bailout negotiations as planned. Delia Velculescu, the International Monetary Fund's head of mission, arrived in Athens on Thursday.
The country's ruling Syriza party will hold an emergency party congress in September to settle the rift between Prime Minister Alexis Tsipras and the party's left wing, Syriza's central committee decided late Thursday.
In a televised address to the central committee, Tsipras warned that the government could fall if not supported by its leftist deputies. "The first leftist government in Europe after the Second World War is either supported by leftist deputies, or it is brought down by them because it is not considered leftist," he said.
On Wall Street Thursday, the DJIA and the S&P 500 both ended flat and the Nasdaq Composite closed up 0.3%.
In Asia Friday, the Nikkei in Tokyo closed up 0.3%, the Hang Seng trades up 0.3%, and the Shanghai Composite is down 0.5%.
The unemployment rate in Japan came in at a seasonally adjusted 3.4% in June, the Ministry of Internal Affairs and Communications said. That was above forecasts for 3.3%, which would have been unchanged from the May reading.
Meanwhile consumer prices in Japan gained 0.4% on year in June, the Ministry said. That beat expectations for an increase of 0.3%, although it slowed from 0.5% in May. On a monthly basis, inflation dipped 0.2%.
On the corporate front, Lloyds Banking Group reported higher profit in the first half, said it will consider returning surplus capital to shareholders in future, and raised its guidance for 2015.
However, the bank took a "disappointing" GBP1.4 billion provision for the payment-protection insurance scandal in the half. Lloyds said it made a GBP1.19 billion pretax profit in the six months to the end of June, up from GBP863 million in the corresponding half last year. Underlying profit, which strips out costs such as the provision for PPI, increased to GBP4.38 billion from GBP3.82 billion.
International Consolidated Airlines Group maintained its targets for the current financial year as its operating profit surged in the first half.
The FTSE 100-listed airline, which owns British Airways and Iberia and which is in the process of acquiring Irish flag carrier Aer Lingus Group, said its operating profit excluding exceptional items in the first half to the end of June was up to EUR555 million, sharply higher than the EUR230 million it posted a year earlier.
Total revenue for IAG rose to EUR10.36 billion from EUR9.29 billion, as its passenger revenue in the half increased to EUR9.12 billion from EUR8.18 billion. At constant currencies, however, revenue was down by 2%, as the reported figure was flattered by the weak euro.
BG Group reported a slump in revenue in the second quarter leading to an almost halving of earnings by one measure, as a large rise in production was not enough to offset the fall in oil and gas prices.
The FTSE 100-listed multi-commodity company reported earnings before interest, tax, depreciation and amortisation of USD1.37 billion in the second quarter of 2015, down from USD2.64 billion a year earlier as revenue slumped to USD3.97 billion from USD5.50 billion.
In the economic calendar, eurozone consumer prices are at 1000 BST, while in the afternoon are the Chicago purchasing managers index at 1445 BST and the Reuters/Michigan consumer sentiment index at 1500 BST.
By Neil Thakrar; [email protected]; @NeilThakrar1
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