London pre-open: FTSE to extend losses as Greek talks drag on
UK stocks were set to fall for the fifth straight day on Thursday as investors continue to digest developments in Greece and comments from the Federal Reserve overnight.
City sources predict the FTSE 100, which closed at a five-month low of 6,680.55 on Wednesday, will open around 21 points lower.
A Eurogroup meeting in Luxembourg on Thursday has been touted as the “last chance saloon” for Greece to agree a deal in time of the end of June, according to CMC Markets analyst Michael Hewson.
Athens must repay €1.6bn due to the IMF by 30 June but has admitted that it has insufficient funds to do and that compromising to unlock frozen aid would be a necessity.
“With relations now so bad, a deal today at the Eurogroup meeting seems implausible. Serious consideration from markets is being giving to Alex Tsipiras when he says that he’d rather Greece default than endure more austerity, he may actually get what he wants," London Capital Group's Jonathan Sudaria said.
A barrage of US economic data is likely to also garner some attention following a policy decision by the Federal Open Market Committee on Wednesday evening.
Policymakers struck a relatively dovish tone as they downgraded their growth forecasts for the US this year and warned that factors such as Greece and the strength of the US dollar could continue to weigh on the economy.
At the same time, however, the so-called ‘dot plot’ chart projections of the Fed funds rate pointed to at least one, or possibly two, rate rises before the end of the year.
On the agenda for Thursday’s session will be US data on the balance of payments, the consumer price index, jobless claims, the current account balance, the leading indicators index and the Philly Fed index.
Closer to home, UK retail data is expected to show that national sales declined 0.2% in May after a 1.2% jump in April which was the strongest increase since November. Compared with May 2014, sales growth is expected to have eased to 4.3% from 4.7%.
Stocks to watch
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