26th Jun 2015 06:38
LONDON (Alliance News) - The FTSE 100 looks set to continue its decline Friday as investors continue to face a lack of agreement between Greece and its creditors on an otherwise quiet day in the economic calendar, while Tesco's decline in like-for-like sales slowed in its first quarter.
Greece's debt situation continues to rumble away for markets after Thursday's negotiations between euozone finance ministers, and separate talks between Greek Prime Minister Alexis Tsipras and the chiefs of the country's creditors - the European Commission, the European Central Bank and the International Monetary Fund - all concluded without any progress. With another meeting of eurozone finance minister scheduled for Saturday, there is likely to be more comments from Greek officials and representatives of its creditors to keep markets on edge Friday.
"What matters for the financial markets is the [European Central Bank's] reaction to the events as far as its [emergency liquidity assistance] policy is concerned rather than an extension of the aid package or the [International Monetary Fund] payment by themselves. Predicting what the ECB will do is difficult, as what matters in the end is whether the European central bankers will stick to their rules or whether they are prepared to be used as the henchmen of the politicians," says Commerzbank analyst Ulrich Leuchtmann.
The ECB has already raised its ELA funding to Athens twice this week and the emergency cap stands around EUR89 billion. The bank also said this week that it is ready to provide further support whenever required. Extra emergency assistance was extended after deposit withdrawals at the country's banks rapidly climbed on increasing fears of an exit from the eurozone.
IG says futures indicate the FTSE 100 to open lower at 6,784.4. The index closed down 0.5% at 6,807.82 on Thursday, ending a run of five successive sessions in the green.
On Wall Street Thursday, US indices reversed a higher open to close lower. The DJIA closed down 0.4%, the S&P 500 ended down 0.3%, and the Nasdaq Composite closed down 0.2%.
In Asia Friday, the Nikkei in Tokyo closed down 0.3%, the Hang Seng is down 1.8%, and the Shanghai Composite is off 6.9%.
Tesco reported a drop in like-for-like sales in the first quarter of its financial year, as the grocer tries to pick itself up from the difficult year it recently finished and it continues cutting prices in a deflationary UK food market. The UK's largest retailer reported a 1% drop in group like-for-like sales excluding fuel in the 13 weeks to May 30.
Combined UK and Republic of Ireland like-for-like sales excluding fuel declined 1.5% and international like-for-likes fell 1.0%. In the same period last year, the UK and Republic of Ireland like-for-like sales declined 4.1%, while international like-for-like sales declined 1.7%.
Private equity firm Cinven confirmed it has sold its remaining 8.4% stake in private hospital group Spire Healthcare Group for GBP115.2 million. Cinven sold 33.89 million shares in Spire at 340 pence per share. Spire shares closed at 349.00p Thursday.
FTSE 250-listed homewares retailer Dunelm Group said it has appointed John Browett as its new chief executive, with current chief Will Adderley to revert to his role as deputy chairman. Browett will join Dunelm's board on July 1 and will take over as chief executive on January 1, 2016 following a six-month handover period working alongside Adderley.
In the economic calendar, there is consumer confidence data from France at 0745 BST, eurozone private loans data at 0900 BST and the US Reuters/Michigan Consumer Sentiment Index at 1500 BST. Bank of England Governor Mark Carney will be making a speech at the Inclusive Capitalism Annual conference in London at 1545 BST.
By Neil Thakrar; [email protected]; @NeilThakrar1
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