London pre-open: Weak start expected as Greek concerns mount

5th Feb 2015 07:28

Optimism surrounding Greece, which sent UK markets to a five-month high earlier this week, quickly faded on Thursday with stocks expected to drop early on.The cautious start also comes ahead of a monetary policy decision in the UK, with a statement from the Bank of England due out at noon.City sources predict the FTSE 100 will open 35 points lower than Wednesday's close of 6,860.02.The European Central Bank (ECB) said in a statement late on Wednesday that it will lift the waiver on using Greek government bonds as collateral for lending to its banks. It said the decision was "based on the fact that it is currently not possible to assume a successful conclusion of the [bailout] programme review".The comments came as the newly-elected Greek government seeks to ease the terms of its €240bn bailout with its creditors.Greek banks will still be able to access funding via the Enhance Liquidity Assistance (ELA) programme run by its central bank, though at a much higher cost."We interpret this decision by ECB's Governing Council to force Greek banks to access more expensive funding (via ELA) as a "nudge" to the Greek government to speed up negotiations with the EU and announce soon an agreement on a programme," said analysts at Barclays.Stocks to watchBT has confirmed reports it has settled on terms of its acquisition of EE from Deutsche Telekom and Orange, saying it will be spending £12.5bn on the UK mobile network. In a statement on Thursday morning, the telecom giant said it had agreed definitive terms of the deal, which will be financed by a combination of new debt facilities and a £1bn placing of BT shares.Tesco has become embroiled in an official investigation launched by Christine Tacon on Thursday. The retailer is suspected of breaching the Groceries Supply Code of Practice and an investigation into the accusations will now take place over the next six to nine months.After a year of investment in its drug pipeline, Astrazeneca's earnings per share fell more than expected in the fourth quarter, dragging the full year number short of the market's target. The drugmaker posted a fourth quarter net loss of $321m, with core EPS of $0.76 meaning full year figure was down 8% to $4.28, with analysts epecting $4.39.