9th Mar 2015 10:44
LONDON (Alliance News) - UK shares trade lower mid-morning Monday as investors continue to entertain the potential for a summer rate hike by the US Federal Reserve and as focus shifts to Monday's Eurogroup meeting on Greece.
The FTSE 100 is down 0.6% at 6,870.50, the FTSE 250 is down 0.5% at 17,195.05, and the AIM All-Share index is down 0.1% at 717.59.
In Europe, the CAC 40 in Paris is down 0.5%, and the DAX 30 in Frankfurt is down 0.3%.
The Eurogroup of finance mininsters are to meet in Brussels at 1430 GMT, following its decision last month to extend Greece's loan agreement for four months. The group will be discussing Greece's proposed reforms on which the loan extension was predicated.
Greece must present further reform proposals under the terms of its bailout, Eurogroup chief Jeroen Dijsselbloem said Monday ahead of the meeting.
"The stakes continue to remain high against a backdrop of chatter out of Athens that the Greek government might look to call a referendum in the event that the EU continues to block any form of new deal," says Michael Hewson, chief market analyst at CMC Markets.
A EUR1.1 trillion stimulus programme by the European Central Bank got underway Monday. The ECB's plans to spend EUR60 billion a month on buying state and private sector debt assets has already led to solid gains in European stocks. It has also pushed government bond yields in parts of the eurozone into negative territory, which should, in theory, promote investment.
But not everyone is convinced.
"The bond buying program by the ECB is way overdue in terms of saving the Eurozone economy and it could be that this becomes an even harder sell over the next few months," says James Hughes, chief market analyst at eToro.
"Far from ushering in a new era of economic prosperity it seems that [ECB President] Mario Draghi is looking at potentially the final nail in the Eurozone coffin, as it becomes more and more apparent that the Eurozone is a model that is no longer viable, which has pretty much been the case for the last 3 years," Hughes adds.
WPP is the biggest of the small number of gainers in the FTSE 100 Monday, up 0.7%. The media buying giant raised its total dividend by 12% and forecast a year of growth in 2015 similar to 2014, as it met expectations for headline profit before interest and tax, and earnings per share for 2014. WPP posted a headline profit before interest and tax of GBP1.68 billion for 2014, up from GBP1.66 billion in 2013, and in line with analyst expectations provided by the company of GBP1.67 billion.
The company's headline profit before interest and tax figure excludes amortisation, impairment, gains on disposals or re-measurement of equity interests, write-downs, restructuring costs of shares of exceptional losses of associates.
Hansteen Holdings, down 2.5%, is one of the biggest fallers in the FTSE 250, despite the company saying its pretax profit doubled in 2014, as it sold properties into the buoyant UK property investment market, and it raised its dividend and announced a special dividend as it also gave a positive outlook.
The property investor reported a pretax profit of GBP131.2 million for 2014, up from GBP65.3 million, buoyed by the gains on property sales, while its normalised income profit, which excludes profits or losses from the sale of properties and therefore represents the repeatable income of the business, rose to GBP48.2 million, from GBP39.4 million in 2013.
Aside from the Eurogroup meeting, the US labour market conditions index is due at 1400 GMT.
US futures point to a lower opening, with the DJIA and the S&P 500 pointed down 0.2%, while the Nasdaq 100 is expected to open 1.0% lower.
By Neil Thakrar; [email protected]; @NeilThakrar1
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
HSTN.LWPP