16th Feb 2015 07:34
LONDON (Alliance News) - UK stocks are set to open flat to lower Monday ahead of the second Eurogroup meeting to negotiate Greece's debt bailout.
The second meeting of Eurozone finance ministers to discuss the next steps for Greece following Wednesday's meeting last week is due to take place Monday. Thousands of Greeks took to the streets of Athens on Sunday to protest the austerity policies imposed on the country by its foreign creditors. The protesters gathered outside the Greek Parliament to demand an end to the policies they said were "impoverishing" the people and leading to an exodus of young people facing unemployment at home.
"For now investors appear to discounting their concerns about the situation in Greece, despite the fact that today's Eurogroup meeting is unlikely to arrive at any form of solution before the bailout program expires at the end of this month," says Michael Hewson, chief market analyst at CMC Markets.
"There appears to be a touching, if somewhat naïve belief that what is going on in Brussels between the new Greek government and EU authorities is nothing more than some form of political theatre, and that eventually one side will be forced to back down," Hewson adds.
Rhys Herbert, a senior economist at Lloyds Bank, believes investors do hold out some hope for progress to be made.
"Friday's rally in the Greek bond market suggests that investors are expecting today's extra meeting of euro area finance ministers will yield some progress on the Greek issue. However, EU Commission President Juncker noted that the two sides are still far apart," Herbert says.
"A failure to reach agreement today will switch attention to Wednesday when the European Central Bank has to decide whether or not to extend Emergency Liquidity Assistance to Greek banks," Herbert adds.
IG indicates the FTSE 100 will open 2.5 points lower at 6,871.0. The index closed up 0.7% Friday at 6,873.52 following better-than-expected economic results from key nations in the eurozone, while oil stocks were bolstered as Brent oil surpassed the USD60 a barrel mark for the first time this year.
Brent oil trades at USD61.40 a barrel ahead of the open Monday.
Wall Street also closed higher Friday, with the DJIA ending up 0.3%, having surpassed the 18,000 mark for the first time in 2015. The S&P 500 closed up 0.4% having touched a record intraday high. The Nasdaq Composite closed up 0.8%.
US indices will be closed Monday to celebrate President's Day.
In Asia on Monday, the Japanese Nikkei closed up 0.5% after the Japanese economy exited recession.
Japan's gross domestic product grew 2.2% on year in the fourth quarter of 2014, the Cabinet Office said in Sunday's preliminary reading. The headline figure was well shy of forecasts for an increase of 3.7% following the revised 2.3% decline in the third quarter (originally -1.9%). It did, however, mark an end to the recession that started with a 7.1% tumble in Q2 - which was due in large part to a sharp decline in consumer spending following the implementation of a consumption tax hike in April.
The Hang Seng trades up 0.1% and the Shanghai Composite trades up 0.6%.
Hammerson reported a jump in pretax profit for 2014, boosted by gains made on the valuation of its property portfolio, as its net rental income also ticked higher over the year.
The FTSE 100-listed property developer said its pretax profit for the year to the end of December was GBP703.1 million, more than double the GBP341.2 million posted a year earlier. The profit was driven higher by a big gain on the revaluation of its portfolio, which added GBP436.8 million to the pretax profit for the year, against only GBP90.3 million last year.
Land Securities Group said it has agreed a deal to acquire the leasehold interest on the 21 Moorfields site in London's Liverpool Street for GBP16.5 million. The site comprises vacated 1970s offices and a Transport for London worksite, Land Securities said, and is located at the western entrance to Liverpool Street's Crossrail station.
AstraZeneca late on Friday said a US court has ruled its patent on its Pulmicort Repsules asthma treatment invalid, but said the decision will not impact its guidance for 2015. The FTSE 100-listed pharmaceutical company said the US District Court for the District of New Jersey has ruled the patent protecting the product in the US is invalid.
888 Holdings on Monday said it has terminated talks with William Hill about a possible takeover after it failed to come to terms with a key shareholder.
888 last week said it had received an approach from FTSE 250-listed William Hill to acquire 888 for 200 pence plus a 3 pence dividend per share. But 888 said that owing to a "significant difference of opinion on value with a key stakeholder", it has been unable to reach an agreement and has terminated the talks with William Hill
The economic calendar on Monday is very quiet, with no US releases due to its holiday. Eurozone trade balances for December at 1000 GMT, and German Buba monthly report expected at 1100 GMT.
By Neil Thakrar; [email protected]; @NeilThakrar1
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