London pre-open: Stocks to edge higher as Chinese equities bounce

9th Jul 2015 07:21

Stocks were being called to start the session marginally higher thanks to an overnight bounce in Chinese equities as traders awaited fresh reform proposals out of Athens, possibly as soon as today.The Shanghai Stock Exchange's composite index was rising 6.71% to 3,742.38 points as of 07:14.Nonetheless, some market commentary warned that it might just be a 'dead cat' bounce following several weeks of sharp drops and so-called forced selling in many asset classes. There was also some market chatter to be heard regarding the imminent risk of bankruptcies at Chinese banks or securities brokers.Closer to home, looming deadlines for Greece offered a little hope that a deal may finally be reached, some analysts suggested."This hope maybe misplaced," said Jasper Lawler, Market Analyst at CMC Markets UK."European creditors seem to think that the threat of the ECB pulling the plug on its emergency lending to Greek banks will spur Athens into signing off on terms they have previously rejected. With the referendum as backup, it seems more likely that Tsipras and co will take the threat of collapse back to the creditors,"An increasingly insecure Fed?Traders were also expected to keep close tabs on a flurry of speeches in the afternoon from three rate-setters at the US Federal Reserve. That followed the release of a more dovish than expected set of Fed minutes on Wednesday evening.At their June meeting rate-setters at the US central bank said there was "uncertainty about whether Greece and its official creditors would reach an agreement and about the likely pace of economic growth abroad, particularly in China and other emerging market economies," the minutes of that meeting showed."Overall, we maintain our baseline outlook for a rate hike in September, given our conviction about incoming data and their signal about economic momentum. Nevertheless, an unusually insecure Fed and rising external risks certainly open the door for FOMC members to seize on any point of weakness or uncertainty to delay rate hikes," Barclays analysts Michael Gapen said in a research note e-mailed to clients.Also overnight, Chinese consumer prices advanced at a 1.4% year-on-year pace in June, up from the prior month's 1.2% pace and economists' forecast for a rise of 1.3%.The MPC will announce its latest policy decision at noon.Homebuilder sees continued strong demandRevenues were flat at Primark owner Associated British Foods in the 40 weeks to 20 June, but up 2% against the same period last year if currency moves are ignored. An 8% increase in stores selling space helped sales at Primark rise 9%, or 13% at constant currency rates, although like-for-like sales were flat despite a positive UK LFL performance.Housebuilder Barratt Developments said in a trading update that it expected to see a 45% increase in full-year pre-tax profit to £565m, from £390.6m last year amid continued strong demand in the housing market. For the year ended 30 June 2015, the average selling price for private homes was up around 8% to £262,000, driven by further changes in mix and underlying house price inflation.Bwin.party confirmed AIM-listed rival GVC had tabled a cash and shares offer for the company. The bid valued Bwin, party at 110p per share, the company said in a statement. The board has determined to work with GVC so that they can finalise their offer over the coming days.WPP may team up with General Atlantic to make a bid for Tesco's Clubcard unit, according to Bloomberg.