London pre-open: Weak start expected as Greek fears intensify

UK stocks are expected to dip slightly on Friday morning as investors react to the latest disappointment in Greek debt talks, after finance ministers failed to come up with cash-for-reforms deal in Luxembourg.

City sources predict the FTSE 100 will open six points lower than Thursday’s close of 6,707.88.

Although expectations were already low ahead of Thursday’s Eurogroup meeting, another break-down in talks is likely to dampen sentiment on the markets, due to increasing concerns about a run on Greek banks.

According to reports, some €2bn has already been with withdrawn from Greek banks so far this week, including a record €1bn on Wednesday alone. An ECB official has warned that Greek banks may not be able to open next week due to insufficient funds.

Leaders have now agreed to hold an emergency EU summit on Monday in what is being seen as a last-ditch attempt to secure funds for Greece, as it nears a €1.6bn debt repayment to the IMF on 30 June.

“A slightly delayed reaction to the dovish Fed spurred a rally in the US overnight, but European traders won’t be joining in. With time practically up and no deal in sight, Greece and its creditors have resorted to throwing churlish ultimatums at each other,” said London Capital Group dealer Jonathan Subarea.

“With reports that retail banks won’t open on Monday; it’s pretty hard to stay bullish,” he said.

Stocks to watch

Standard Life’s chief executive David Nish will step down on 5 August after six years in the role, to be succeeded by Keith Skeoch, who is currently chief executive of Standard Life Investments.

N Brown, the home shopping group which brands such as Simply Be and Jacamo, said its full-year guidance remains unchanged after an “encouraging start to the year”. The Manchester-based business said group turnover was up 2.5% in the first quarter ended 29 May, following a 0.1% decline over the full previous financial year.

Oil and gas industry services provider Petrofac has won repeat orders for operations and maintenance work worth around $400m. The largest award will see it provide operations and maintenance teams for CNR International across its North Sea assets for the next five years.