FTSE LIVE: Footsie holds firm as investors await outcome of key eurozone meeting on Greek bail-out
FTSE LIVE: Footsie holds firm as investors await outcome of key eurozone meeting on Greek bail-out, The Footsie managed to hold on to its modest gains in late afternoon trade despite ongoing weakness in European markets and an opening drop by US stocks as investors cautiously awaited the outcome of a meeting of vital eurozone finance ministers on Greece.
With an hour of trading to go in London, the FTSE 100 index was up 5.2 points at 6,894.1, well off the day’s peak of 6,920.51 but still within sight of its record closing high of 6,930.
European markets remained lower, with Frankfurt’s Dax 30 index down 0.2 per cent and the CAC 40 index in Paris off 0.7 per cent as the Brussels meeting got underway at 2pm, although no news is expected to emerge until well into the night.
Connor Campbell, financial analyst at Spreadex said: ‘The narrative that has arisen today very much confirms the idea that this issue is between Greece and Germany, with the other members merely picking sides at this point.
‘The extensive leverage Germany has compared to Greece suggests there can be only one winner of this fiscal tug-of-war. What remains unknown is the form this victory will take.’
In early trade on Wall Street, the blue chip Dow Jones Industrial Average was off 14.5 points to 17,971.3, while the broader S&P 500 index shed 7.3 points at 2,090.1, and the tech-laden Nasdaq Composite lost 4.2 points at 4,920.5
The day’s US data showed manufacturing activity picking up in February, with Markit’s flash purchasing managers index climbing to 54.3, up from a final January reading of 53.9, and above the 50 level that separates expansion from contraction.
However, economists pointed out that details in the report were much weaker and indicated the US economy has entered a slower growth phase.
Earlier today. PMI readings out of the eurozone showed business activity in the region grew at a faster pace in February than expected, to hit a seven-month high boosted by the launch of a massive bond-buying programme by the European Central Bank.
12.15: The Footsie had extended its gains by lunchtime, renewing the push up towards all-time highs as talks continued over the future of Greece in the euro, with the UK blue chip index expected to hit that milestone of an agreement to solve the country’s debt crisis is reached.
By mid session, the FTSE 100 index was 20.7 points higher at 6,909.6, within sight of its record closing high of 6,930 even though European markets remained flat to a touch lower await the start at 2pm of a key meeting of Eurogroup finance ministers today in Brussels.
Yesterday Germany criticised Athens' latest proposals for a six month extension to its bailout settlement as a ‘Trojan horse" designed to dodge its commitments.
A spokesman for Chancellor Angela Merkel later said it offered a starting point for further talks, but if there is no agreement in the next few days there are fears of a bank run as the country moves to the brink of leaving the euro.
The single currency remained weaker against the dollar awaiting the Greek debt meeting outcome but was flat against the pound as sterling suffered a hangover after rising sharply on Wednesday amid signs that an interest rate hike may be closer than many analysts had been expecting.
The pound was slightly lower versus the dollar at 1.5360, even though retail sales figures for January were slightly better than expected at down 0.3 per cent.
There was also a boost for the Government after it emerged that public sector finances - excluding the effect of bank bail-outs - were in surplus by £8.8billion in January, up £2.3billion from the surplus in the same month last year.
Borrowing for the fiscal year starting in April 2014 is now £74billion, 7.5 per cent lower than the same period last year and better than the annual fall in the deficit forecast by the independent Office for Budget Responsibility.
Insurance group Standard Life was a big FTSE 100 riser after it revealed a 19 per cent jump in 2014 operating profits to £604million as it more than doubled the number of auto-enrolment pension customers it has in the UK last year.
With the Edinburgh-based company also increasing its total dividend by 7.8 per cent, shares in the insurer jumped 3 per cent or 11.85p to 420.35p.
With Brent crude prices steadying back above $60 a barrel after a rally in oil prices had stalled earlier in the week, explorer Tullow Oil was the top blue chip gainer up 10.7p at 408.9p, while Royal Dutch Shell added 7p at 2116p, and BP firmed 1.45p at 447.15p.
BP shares failed to be upset by reports that said it had lost its bid to reduce the maximum civil fine of £8.9billion that the company could face for its role in the 2010 Gulf of Mexico oil spill.
Pumps manufacturer Weir Group was also a good gainer, adding 48p at 1,910p after Goldman Sachs upgraded its rating to buy from neutral following recent sharp falls in the share price sparked by concerns over the impact of the recent slide in the oil price on its business.
But broker comment weighed on blue chip housebuilder Persimmon, down 18p at 1,691p after JPMorgan Cazenove lowered its rating to neutral from overweight in a sector review.
But the broker made the opposite move on mid cap peer Bovis Homes, upping its stance to overweight from neutral. Bovis shares gained 17.0p at 933.5p.
Shares in troubled outsourcing firm Serco topped the FTSE 250 risers board, jumping over 7 per cent or 14.1p higher to 214.5p receiving a much-needed boost as broker Credit Suisse upgraded its rating for the stock to neutral from underperform.
10.00: The Footsie clung on to a modest gain as the morning session progressed, albeit in lacklustre trading with investors cautious ahead of a key meeting of Eurogroup finance ministers this afternoon to discuss Greece’s latest debt proposals.
By mid morning, the FTSE 100 index was 5.2 points higher at 6,894.1, but European markets stayed weak, with the Dax 30 index in Frankfurt and Paris’s CAC 40 index both down 0.2 per cent as investors awaited the outcome of the vital meeting in Brussels, scheduled to start at 2pm.
Germany yesterday criticised Athens' latest proposals for a bailout settlement as a ‘Trojan horse’ designed to dodge its commitments. If there is no agreement in the next few days there are fears of a bank run as the country moves closer to leaving the euro.
On currency markets, the single currency fell against the dollar for a third consecutive day, down to 1.1318 as traders remained cautious before the meeting on Greece's request for a six-month loan extension.
The euro was also lower against the pound at 1.3579, but the UK currency was weak versus the dollar at 1.5363 after today’s UK data slightly dampened down recently revived hopes that the Bank of England might consider hiking UK interest rates sooner than currently expected.
The Office for National Statistics said UK retail sales volumes fell 0.3 per cent on the month in January, more than the 0.2 per cent fall predicted, after a rise of 0.2 per cent in December.
On an annualised basis, retail sales were up 5.4 per cent compared with a year earlier but that was also below forecasts for a rise of 5.9 per cent.
Retail sales rose strongly in the last two months of 2014, boosted by Britain's first major round of US-style Black Friday sales in November, and as shoppers bought more fuel in December on the back of falling oil prices.
Dennis de Jong, managing director at UFX.com said: ‘A worry for retailers is that heavy discounting has become the norm over the past couple of months and it is going to be interesting to see if sales stack up when we return to more normal sales strategies.
‘Plummeting inflation also has the potential to keep money in peoples’ wallets as they bide their time, waiting for bigger and better offers.’
In a separate release, the ONS also revealed that the UK public finances in January recorded their biggest monthly surplus in seven years at £8.8billion, up 35 per cent from a year earlier thanks to a jump in tax receipts, although that also slightly short of a £9.0billion forecast.
January is usually a surplus month, due to self-assessment tax return receipts. This year, those figures were boosted by delayed payments of bonuses in the 2013/14 tax year. Income tax and capital gains tax revenues rose by 6.1 per cent compared with a year earlier.
Deficit reduction has been the key economic policy of the Conservative-led government since it came to power in 2010, but progress in cutting the budget gap has been slow in the current financial year.
Government borrowing for the first 10 months of the tax year fell to £74.0billion, however, down 7.5 per cent compared the same point last year.
Among equities, insurance group Standard Life was the biggest FTSE 100 riser after it said operating profits grew 19 per cent to £604million last year.
It added that it more than doubled the number of auto-enrolment pension customers in the UK last year, taking the total to over 560,000 since the process began. Assets under administration grew 38 per cent to £296.6billion.
With the Edinburgh-based company increasing its total dividend by 7.8 per cent, shares in the company jumped 3 per cent or 11.85p to 420.35p.
The biggest faller in the top flight was B&Q owner Kingfisher, which shed 8p to 339.9p after Barclays downgraded its rating for the home improvement retailer to underweight from equal-weight.
Analysts at Barclays said in a note: ‘Kingfisher's earnings momentum has been negative for some time and ahead of the new CEO's business update we believe it will remain so as underlying business trends don't seem to have improved.
We expect earnings estimates to continue being under pressure hence we expect shares to continue to underperform the market in line with negative earnings revisions.’
Broker comment also weighed on blue chip housebuilder Persimmon, down 18p at 1,691p after JPMorgan Cazenove lowered its rating to neutral from overweight in a sector review.
But the broker made the opposite move on mid cap Bovis Homes, upping its stance to overweight from neutral. Bovis shares gained 17.0p at 933.5p.
And shares in troubled outsourcing firm Serco received a much-needed boost after broker Credit Suisse upgraded the stock to neutral from underperform. Serco shares topped the FTSE 250 leader board, up 7 per cent higher, a rise of 13.75p to 214.15p.
Plastic, fibre and foam products group Essentra was also a mid cap gainer, adding 16p at 901p after 2014 results exceeded expectations, with like-for-like revenue up 9 per cent and adjusted earnings per share rising 19 per cent.
08:25: The Footsie made a small gain in cautious early trading, with European market lower and falls overnight by US stocks as investors focus on negotiations over Greece's debt crisis and a renewed decline in oil prices.
In opening deals, the FTSE 100 index was up 3.4 points, at 6,889.1, having closed down 9.18 points yesterday. The index rose to a 15-year closing high of 6,921.32 on Wednesday, just 30 points below the all-time peak.
European markets were weaker, however, with both Germany's Dax 30 index and France's CAC 40 index off 0.1 per cent ahead of a key meeting of Eurogroup finance ministers this afternoon to discuss Greece's new proposal to extend its bailout programme.
Overnight US stocks were lower after Germany yesterday rebuffed the proposal by Greece to extend its bailout and after some mixed US economic data.
The falling oil price was also a factor with energy giants Chevron and Exxon Mobil down 1.9 per cent and 1.7 per cent respectively. Brent crude today managed to tick higher, however, pushing back above $60 a barrel.
But Japanese markets shrugged off Greek concerns with its benchmark index rising to a fresh 15-year high, while trading in the rest of Asia remained subdued due to the Lunar New Year holidays.
Eurozone finance ministers will hold vital third meeting in Brussels this afternoon to try and solve the crisis over Greece's bail-out, although Germany's swift rejection of the Greek government's new proposal should make discussions feisty. The existing bailout deal expires at the end of the month and it is now very likely possibility Greece could run out of money.
Jasper Lawler, at CMC Markets, said: 'Both parties of course want to give away as few concessions as possible so by its very nature, any agreement will probably only be found at the 11th hour.
'Until an agreement is found; the upwards momentum built up in European markets during January could remain contained,' he added
Important economic indicators out today in Europe include flash PMI readings for the German, French and overall Eurozone services and manufacturing sectors. Analysts expect the readings to show modest improvement in February.
In the UK, retail sales for January will be released at 9.30 am and analysts will be looking for evidence that the supposed 'good deflation' effect for consumers has kicked in.
Also out this morning will be the latest UK public finance data, with forecasts indicating a reduction in public sector borrowing.
Stocks to watch:
STANDARD LIFE - The insurer said its operating profit jumped 19 per cent to £604million, but warned annuity sales would be hit this year by government pension reforms.
BP - A US judge has rejected the oil major's attempt to reduce the maximum civil fine it could face for its role in the 2010 Gulf of Mexico oil spill, leaving it potentially liable to pay $13.7billion under the federal Clean Water Act.
GLAXOSMITHKLINE - Australia's competition regulator said it will not oppose a three part deal between Novartis and the British drug maker to trade more than $20billion worth of assets, following approval from EU regulators.
BT - The telecom giant has received a boost in the battle over broadband pricing after the European Commission asked UK regulator Ofcom to redesign proposals intended to protect competitors of the former telecoms monopoly.
ROYAL DUTCH SHELL - Union negotiators have rejected the latest contract offer from oil companies and said the largest US refinery strike since 1980 may spread to more plants.
MAN GROUP - The world's biggest listed hedge fund company said it has agreed to buy the investment management business of NewSmith, an equity investment manager with $1.2billion of funds under management.
BHP BILLITON - The miner said it had ceased ship loading at Australia's Hay Point coal terminal due to a cyclone crossing the Queensland state coastline.
With an hour of trading to go in London, the FTSE 100 index was up 5.2 points at 6,894.1, well off the day’s peak of 6,920.51 but still within sight of its record closing high of 6,930.
European markets remained lower, with Frankfurt’s Dax 30 index down 0.2 per cent and the CAC 40 index in Paris off 0.7 per cent as the Brussels meeting got underway at 2pm, although no news is expected to emerge until well into the night.
Connor Campbell, financial analyst at Spreadex said: ‘The narrative that has arisen today very much confirms the idea that this issue is between Greece and Germany, with the other members merely picking sides at this point.
‘The extensive leverage Germany has compared to Greece suggests there can be only one winner of this fiscal tug-of-war. What remains unknown is the form this victory will take.’
In early trade on Wall Street, the blue chip Dow Jones Industrial Average was off 14.5 points to 17,971.3, while the broader S&P 500 index shed 7.3 points at 2,090.1, and the tech-laden Nasdaq Composite lost 4.2 points at 4,920.5
The day’s US data showed manufacturing activity picking up in February, with Markit’s flash purchasing managers index climbing to 54.3, up from a final January reading of 53.9, and above the 50 level that separates expansion from contraction.
However, economists pointed out that details in the report were much weaker and indicated the US economy has entered a slower growth phase.
Earlier today. PMI readings out of the eurozone showed business activity in the region grew at a faster pace in February than expected, to hit a seven-month high boosted by the launch of a massive bond-buying programme by the European Central Bank.
12.15: The Footsie had extended its gains by lunchtime, renewing the push up towards all-time highs as talks continued over the future of Greece in the euro, with the UK blue chip index expected to hit that milestone of an agreement to solve the country’s debt crisis is reached.
By mid session, the FTSE 100 index was 20.7 points higher at 6,909.6, within sight of its record closing high of 6,930 even though European markets remained flat to a touch lower await the start at 2pm of a key meeting of Eurogroup finance ministers today in Brussels.
Yesterday Germany criticised Athens' latest proposals for a six month extension to its bailout settlement as a ‘Trojan horse" designed to dodge its commitments.
A spokesman for Chancellor Angela Merkel later said it offered a starting point for further talks, but if there is no agreement in the next few days there are fears of a bank run as the country moves to the brink of leaving the euro.
The single currency remained weaker against the dollar awaiting the Greek debt meeting outcome but was flat against the pound as sterling suffered a hangover after rising sharply on Wednesday amid signs that an interest rate hike may be closer than many analysts had been expecting.
The pound was slightly lower versus the dollar at 1.5360, even though retail sales figures for January were slightly better than expected at down 0.3 per cent.
There was also a boost for the Government after it emerged that public sector finances - excluding the effect of bank bail-outs - were in surplus by £8.8billion in January, up £2.3billion from the surplus in the same month last year.
Borrowing for the fiscal year starting in April 2014 is now £74billion, 7.5 per cent lower than the same period last year and better than the annual fall in the deficit forecast by the independent Office for Budget Responsibility.
Insurance group Standard Life was a big FTSE 100 riser after it revealed a 19 per cent jump in 2014 operating profits to £604million as it more than doubled the number of auto-enrolment pension customers it has in the UK last year.
With the Edinburgh-based company also increasing its total dividend by 7.8 per cent, shares in the insurer jumped 3 per cent or 11.85p to 420.35p.
With Brent crude prices steadying back above $60 a barrel after a rally in oil prices had stalled earlier in the week, explorer Tullow Oil was the top blue chip gainer up 10.7p at 408.9p, while Royal Dutch Shell added 7p at 2116p, and BP firmed 1.45p at 447.15p.
BP shares failed to be upset by reports that said it had lost its bid to reduce the maximum civil fine of £8.9billion that the company could face for its role in the 2010 Gulf of Mexico oil spill.
Pumps manufacturer Weir Group was also a good gainer, adding 48p at 1,910p after Goldman Sachs upgraded its rating to buy from neutral following recent sharp falls in the share price sparked by concerns over the impact of the recent slide in the oil price on its business.
But broker comment weighed on blue chip housebuilder Persimmon, down 18p at 1,691p after JPMorgan Cazenove lowered its rating to neutral from overweight in a sector review.
But the broker made the opposite move on mid cap peer Bovis Homes, upping its stance to overweight from neutral. Bovis shares gained 17.0p at 933.5p.
Shares in troubled outsourcing firm Serco topped the FTSE 250 risers board, jumping over 7 per cent or 14.1p higher to 214.5p receiving a much-needed boost as broker Credit Suisse upgraded its rating for the stock to neutral from underperform.
10.00: The Footsie clung on to a modest gain as the morning session progressed, albeit in lacklustre trading with investors cautious ahead of a key meeting of Eurogroup finance ministers this afternoon to discuss Greece’s latest debt proposals.
By mid morning, the FTSE 100 index was 5.2 points higher at 6,894.1, but European markets stayed weak, with the Dax 30 index in Frankfurt and Paris’s CAC 40 index both down 0.2 per cent as investors awaited the outcome of the vital meeting in Brussels, scheduled to start at 2pm.
Germany yesterday criticised Athens' latest proposals for a bailout settlement as a ‘Trojan horse’ designed to dodge its commitments. If there is no agreement in the next few days there are fears of a bank run as the country moves closer to leaving the euro.
On currency markets, the single currency fell against the dollar for a third consecutive day, down to 1.1318 as traders remained cautious before the meeting on Greece's request for a six-month loan extension.
The euro was also lower against the pound at 1.3579, but the UK currency was weak versus the dollar at 1.5363 after today’s UK data slightly dampened down recently revived hopes that the Bank of England might consider hiking UK interest rates sooner than currently expected.
The Office for National Statistics said UK retail sales volumes fell 0.3 per cent on the month in January, more than the 0.2 per cent fall predicted, after a rise of 0.2 per cent in December.
On an annualised basis, retail sales were up 5.4 per cent compared with a year earlier but that was also below forecasts for a rise of 5.9 per cent.
Retail sales rose strongly in the last two months of 2014, boosted by Britain's first major round of US-style Black Friday sales in November, and as shoppers bought more fuel in December on the back of falling oil prices.
Dennis de Jong, managing director at UFX.com said: ‘A worry for retailers is that heavy discounting has become the norm over the past couple of months and it is going to be interesting to see if sales stack up when we return to more normal sales strategies.
‘Plummeting inflation also has the potential to keep money in peoples’ wallets as they bide their time, waiting for bigger and better offers.’
In a separate release, the ONS also revealed that the UK public finances in January recorded their biggest monthly surplus in seven years at £8.8billion, up 35 per cent from a year earlier thanks to a jump in tax receipts, although that also slightly short of a £9.0billion forecast.
January is usually a surplus month, due to self-assessment tax return receipts. This year, those figures were boosted by delayed payments of bonuses in the 2013/14 tax year. Income tax and capital gains tax revenues rose by 6.1 per cent compared with a year earlier.
Deficit reduction has been the key economic policy of the Conservative-led government since it came to power in 2010, but progress in cutting the budget gap has been slow in the current financial year.
Government borrowing for the first 10 months of the tax year fell to £74.0billion, however, down 7.5 per cent compared the same point last year.
Among equities, insurance group Standard Life was the biggest FTSE 100 riser after it said operating profits grew 19 per cent to £604million last year.
It added that it more than doubled the number of auto-enrolment pension customers in the UK last year, taking the total to over 560,000 since the process began. Assets under administration grew 38 per cent to £296.6billion.
With the Edinburgh-based company increasing its total dividend by 7.8 per cent, shares in the company jumped 3 per cent or 11.85p to 420.35p.
The biggest faller in the top flight was B&Q owner Kingfisher, which shed 8p to 339.9p after Barclays downgraded its rating for the home improvement retailer to underweight from equal-weight.
Analysts at Barclays said in a note: ‘Kingfisher's earnings momentum has been negative for some time and ahead of the new CEO's business update we believe it will remain so as underlying business trends don't seem to have improved.
We expect earnings estimates to continue being under pressure hence we expect shares to continue to underperform the market in line with negative earnings revisions.’
Broker comment also weighed on blue chip housebuilder Persimmon, down 18p at 1,691p after JPMorgan Cazenove lowered its rating to neutral from overweight in a sector review.
But the broker made the opposite move on mid cap Bovis Homes, upping its stance to overweight from neutral. Bovis shares gained 17.0p at 933.5p.
And shares in troubled outsourcing firm Serco received a much-needed boost after broker Credit Suisse upgraded the stock to neutral from underperform. Serco shares topped the FTSE 250 leader board, up 7 per cent higher, a rise of 13.75p to 214.15p.
Plastic, fibre and foam products group Essentra was also a mid cap gainer, adding 16p at 901p after 2014 results exceeded expectations, with like-for-like revenue up 9 per cent and adjusted earnings per share rising 19 per cent.
08:25: The Footsie made a small gain in cautious early trading, with European market lower and falls overnight by US stocks as investors focus on negotiations over Greece's debt crisis and a renewed decline in oil prices.
In opening deals, the FTSE 100 index was up 3.4 points, at 6,889.1, having closed down 9.18 points yesterday. The index rose to a 15-year closing high of 6,921.32 on Wednesday, just 30 points below the all-time peak.
European markets were weaker, however, with both Germany's Dax 30 index and France's CAC 40 index off 0.1 per cent ahead of a key meeting of Eurogroup finance ministers this afternoon to discuss Greece's new proposal to extend its bailout programme.
Overnight US stocks were lower after Germany yesterday rebuffed the proposal by Greece to extend its bailout and after some mixed US economic data.
The falling oil price was also a factor with energy giants Chevron and Exxon Mobil down 1.9 per cent and 1.7 per cent respectively. Brent crude today managed to tick higher, however, pushing back above $60 a barrel.
But Japanese markets shrugged off Greek concerns with its benchmark index rising to a fresh 15-year high, while trading in the rest of Asia remained subdued due to the Lunar New Year holidays.
Eurozone finance ministers will hold vital third meeting in Brussels this afternoon to try and solve the crisis over Greece's bail-out, although Germany's swift rejection of the Greek government's new proposal should make discussions feisty. The existing bailout deal expires at the end of the month and it is now very likely possibility Greece could run out of money.
Jasper Lawler, at CMC Markets, said: 'Both parties of course want to give away as few concessions as possible so by its very nature, any agreement will probably only be found at the 11th hour.
'Until an agreement is found; the upwards momentum built up in European markets during January could remain contained,' he added
Important economic indicators out today in Europe include flash PMI readings for the German, French and overall Eurozone services and manufacturing sectors. Analysts expect the readings to show modest improvement in February.
In the UK, retail sales for January will be released at 9.30 am and analysts will be looking for evidence that the supposed 'good deflation' effect for consumers has kicked in.
Also out this morning will be the latest UK public finance data, with forecasts indicating a reduction in public sector borrowing.
Stocks to watch:
STANDARD LIFE - The insurer said its operating profit jumped 19 per cent to £604million, but warned annuity sales would be hit this year by government pension reforms.
BP - A US judge has rejected the oil major's attempt to reduce the maximum civil fine it could face for its role in the 2010 Gulf of Mexico oil spill, leaving it potentially liable to pay $13.7billion under the federal Clean Water Act.
GLAXOSMITHKLINE - Australia's competition regulator said it will not oppose a three part deal between Novartis and the British drug maker to trade more than $20billion worth of assets, following approval from EU regulators.
BT - The telecom giant has received a boost in the battle over broadband pricing after the European Commission asked UK regulator Ofcom to redesign proposals intended to protect competitors of the former telecoms monopoly.
ROYAL DUTCH SHELL - Union negotiators have rejected the latest contract offer from oil companies and said the largest US refinery strike since 1980 may spread to more plants.
MAN GROUP - The world's biggest listed hedge fund company said it has agreed to buy the investment management business of NewSmith, an equity investment manager with $1.2billion of funds under management.
BHP BILLITON - The miner said it had ceased ship loading at Australia's Hay Point coal terminal due to a cyclone crossing the Queensland state coastline.
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