17th Aug 2015 06:33
LONDON (Alliance News) - Stocks in London are called to open higher Monday, rebounding slightly from the heavy losses last week caused by China's devaluation of the yuan and the fall in oil prices.
IG says futures point the FTSE 100 to a higher open at 6,592.0. The index closed down 0.3% at 6,550.74 on Friday with oil-related stocks dragged down by the falling price of crude.
Oil prices continue to remain under pressure ahead of the open Monday, with West Texas Intermediate trading at USD41.98 a barrel and Brent oil trading at USD48.58 a barrel. WTI hit a six and a half year low last Thursday at USD41.65 a barrel.
On Friday, Eurozone finance ministers approved the third bailout package in five years for Greece, which will commit to reforms and spending cuts in return for EUR86 billion in aid. Some of the countries in the eurozone, including Germany, require their parliaments to be consulted on the new bailout. Others that do so are Austria, Estonia, Portugal and Spain. Greece's Parliament approved it Friday.
The bailout package will be needed for Greece to make its EUR3.2 billion loan repayment to the European Central Bank on Thursday.
Chancellor Angela Merkel on Sunday called for debt relief for Greece, ahead of the German parliament vote on the latest bailout for Athens on Wednesday and amid concern that its debt burden is unsustainable.
In an interview with the public broadcaster ZDF, the leader of Europe's biggest economy rejected calls for forgiving some of Greece's debt but she said she saw "wiggle room" on the interest rates it is charged and the maturity dates of its loans.
Merkel's comments come after the European Commission and the European Central Bank argued in a new analysis that debt relief measures, including extending repayment periods, would allow Athens to achieve debt sustainability, a solution advocated by the International Monetary Fund.
On Wall Street Friday, the DJIA and the S&P 500 both closed up 0.4% and the Nasdaq Composite ended up 0.3%.
In Asia Monday, the Japanese Nikkei closed up 0.5%, the Hang Seng trades down 0.8% and the Shanghai Composite is up 0.4%.
The Japanese economy shrank at an annualized rate of 1.6% in the April-to-June period for the first contraction in three quarters due mainly to weak exports and sluggish consumption, the government said. The figure was slightly better than the 1.9% contraction forecast in a poll of economists by the Nikkei business daily.
Bank of England's monetary policy committee member Kristin Forbes said that interest rates could rise sooner than expected in an article for the Sunday Telegraph. Forbes said UK economic recovery would be undermined by waiting too long to raise interest rates. "Maintaining interest rates at the current low levels during an expansion risks creating distortions," she said.
In UK corporate news, Bovis Homes Group said it is on track to deliver its expected volume of new homes, and it is confident in its outlook for 2015 as a whole, after reporting a 8.9% increase in pretax profit for the first half and a record number of legal completions.
In a statement, the FTSE 250 housebuilder said it made a GBP53.8 million pretax profit in the six months to the end of June, compared with GBP49.4 million in the corresponding half the prior year, as revenue increased to GBP350.7 million from GBP322.1 million.
Separately, the average asking price for a house in the UK was down 0.8% on month in August, property tracking website Rightmove said on Monday, coming in at GBP292,284. That followed the 0.1% increase in July.
In the economic calendar, there is eurozone trade balances data at 1000 BST, US Empire State Manufacturing Survey at 1330 BST, and US National Association of Home Builders housing market index at 1500 BST.
By Neil Thakrar; [email protected]; @NeilThakrar1
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