23rd Jun 2015 06:31
LONDON (Alliance News) - London share prices are set to open higher Tuesday, continuing a rally across European equities Monday on optimism for a Greek debt agreement, while Ladbrokes confirms it is in merger talks with unlisted rival Gala Coral Group.
IG says futures indicate the FTSE 100 to open 10 points higher at 6,835.80. The index closed up 1.7% at 6,825.67 on Monday.
Eurozone leaders sought Monday to jump-start stalled bailout negotiations with Greece, but warned that still more efforts are needed to bridge differences with Athens and pull it back from the brink of bankruptcy. A new meeting is scheduled for Thursday.
"I'm convinced that we will come to a final agreement in the course of this week, for the simple reason that we have to find an agreement this week," said European Commission President Jean-Claude Juncker, following an emergency summit in Brussels.
A new reform proposal, submitted by Athens just hours before Monday's talks, has managed to "inject new dynamism into the negotiations", said European Council President Donald Tusk.
Greece has been negotiating since February with the commission, the European Central Bank and the International Monetary Fund on reforms needed to unlock EUR7.2 billion in bailout aid. The talks have entered crunch time, with just days left for Greece to access funds before the European share of its rescue package expires on June 30.
However, CMC Markets chief market analyst Michael Hewson sounds a note of scepticism.
"Yesterday the ECB raised the Emergency Liquidity Assistance ceiling yet again and it seems likely it will have to continue to review it on a daily basis until such time the current bailout program comes to an end at the end of the month, or until negotiations break down again," Hewson says.
"So while it would appear that the Greek government has shifted some ground towards the creditors, the measures put forward yesterday appear to differ little from the same failed policies that have brought Greece to the situation where we are today. That?s not really something worth celebrating," he writes.
In Asia on Tuesday, the Japanese Nikkei 225 closed up 1.9%. Meanwhile, the Hang Seng is up 0.8%. The Shanghai Composite is trading up 0.9%.
Wall Street ended higher Monday. The DJIA closed and the S&P 500 ended up 0.6%. Meanwhile, the Nasdaq Composite finished the session at a new record closing high, up 0.7% at 5,153.97, having reached a high at 5,162.10 earlier in the day.
In the corporate front, Ladbrokes late on Monday confirmed it is holding talks with unlisted rival Gala Coral Group on a possible merger of Ladbrokes and Coral Retail, Eurobet Retail, and Gala Coral's Online businesses. Ladbrokes said the talks are focusing on plans to create an enlarged business which would be traded on the main market of the London Stock Exchange, where the betting firm currently is traded and as a member of the FTSE 250 index.
Ladbrokes said there is no certainty a deal will be done between the two or on the timing of any agreement. It also said that, should the deal proceed, it may undertake an equity placing in order to strengthen the balance sheet of the combined business. The company said that the results of its Business Review, due to be published on June 30, may be rescheduled dependent on how talks with Gala Coral progress.
Meanwhile, the UK government on Tuesday said it has further sold down its stake in Lloyds Banking Group, bringing its stake in the bank below 17%. UK Financial Investments, which manages the government's stake in bailed-out banks, sold off approximately a further 2% of the bank, cutting its stake from 18.99% to 16.87%.
In the economic calendar, French, German, and eurozone Markit manufacturing Purchasing Managers indices are due at 0800 BST, 0830 BST and 0900 BST, respectively. In the US, durable goods are due at 1330 BST, the Redbook index is due at 1355 BST, and US Markit manufacturing PMI is due at 1445 BST. US new homes sales are at 1500 BST.
By Daniel Ruiz; [email protected]
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