London pre-open: FTSE to open little changed, Greece and Asia in focus

8th Jun 2015 07:32

Little change is expected on London markets early on, with only a small number of European data releases scheduled for the week ahead and the uncertainty around Greece's future providing an unsettling backdrop for investors.City sources predict the FTSE 100 will open around four points higher than Friday's close of 6,804.60.Data out from Asia is also likely to influence the market, with China reporting an almost record trade surplus of $59.5bn and a significant upwards revision to Japanese GDP."Greece's decision on Friday to bundle together four repayments due to the IMF this month into one due on 30 June has bought the country a little bit more time at the negotiating table with its creditors," said Oanda's senior market analyst Craig Erlam."That said, given how talks have gone so far, I struggle to see what good that will do as neither side is showing any appetite to budge on key issues of pension and labour market reform and VAT."Over the weekend, Greek Prime Minister Alexis Tsipras faced accusations from the President of the European Commission that he has been distorting the proposals put forward by its international creditors.Jean-Claude Juncker said that in order for the deal negotiations to continue, Tsipras would have to come up with some alternative proposals, saying his current terms are "absurd"."The institutions have already come round to the idea of lower primary surpluses, but I don't see them budging on other key issues unless Greece comes up with a credible alternative," Erlam said.The data out from Japan revealed its first quarter GDP reading was revised significantly higher, with the economy growing by 1% in the first quarter, 3.9% on an annualized basis, significantly ahead of expectations."The revision was mostly driven by higher capital spending which will be music to the ears of the government," said Erlam. "Consumption was also higher, which may suggest that after a year of trauma following the sales tax hike, the consumer may finally be adjusting."In company news, power giant Drax gave a trading update in which it said that while market conditions continued to be challenging, with weak gas markets resulting in the continuation of weak power prices, its expectations for the full year remain unchanged. It continued to experience a strong contracted position and reported a good operational performance by its generating units.On the AIM, construction services group ISG announced the £335,000m acquisition of an additional 49% stake in ACE, its Brazilian fit out partner, taking its interest 69%.Sigma entered into an exclusivity agreement with the Sheffield Housing Company for the provision of new Private Rented Sector homes in the city of Sheffield. Under the terms of the agreement, Sigma and SHC will work together over the next three years to deliver two, three and four bedroom homes for private rent, it said.