London open: FTSE rebounds after sell-off as Greece defaults

UK stock markets advanced on Wednesday morning, bouncing back after a Greece-inspired sell-off pushed the FTSE 100 to a new five-month low the previous session.

As expected, Greece defaulted on its €1.6bn repayment to the IMF on Tuesday night, with the institution officially declaring that Athens was “in arrears”. It said that Greece can now only receive further funding from the global lender once the arrears are cleared.

Nevertheless, after four days of losses, Wednesday morning saw the FTSE 100 was up 0.74% at 6,569.49 in early trading, after settling at 6,520.98 on Tuesday, its lowest close since 12 January.

Dealer Jonathan Sudaria from London Capital Group said: “Now that the inevitable has occurred, it looks as though markets are taking solace in having some mild form of certainty. However, don’t take todays start as a sign of a turn around, more the start of a consolidation period in the run up the referendum.”

Athens handed a last-minute proposal on Tuesday, requesting a new two-year bailout programme from the European Stability Mechanism to help pay €29.15bn in debt due between 2015 and 2017. Eurozone finance ministers held a teleconference call on Tuesday evening but dismissed Greece's offer, which was rumoured to contain no new concessions.

Wednesday’s session is likely to be busy in terms of macroeconomic data, with manufacturing purchasing managers’ indices (PMIs) due out in China, the UK, Eurozone and US, along with the ADP US employment report and a barrage of other economic indicators Stateside.

Overnight, the Chinese government’s ‘official’ manufacturing PMI was unchanged at 50.2 in June, missing the 50.4 estimate, while the non-manufacturing PMI rose to 53.8 from 53.2.

Airlines gain, Serco jumps

Airline stocks such a Easyjet, IAG, Flybe, Dart and Ryanair were all performing well after an Airports Commission report declared that a third runway should be built at Heathrow. The Commission said the runway was “crucial for the UK’s long-term prosperity”.

Profits in the first half of the year at outsourcer Serco were flat compared to the previous year but "a little better" than predicted, causing shares to surge 10% after the open. However, management have not altered their expectations for the full year.

Pub group Greene King edged higher as it reported record retail revenue of £1bn in its full-year results, although profits leaked lower as a result of a decline in like-for-like sales and the impact of the disposal of 275 pubs to Hawthorn Leisure.

Tullow Oil gained after taking action to "re-set" the business for the new oil price environment. The company also slightly increased its guidance for full-year production after enjoying strong West Africa oil production in the first half.

Market Movers
techMARK 3,110.31 +0.88%
FTSE 100 6,569.49 +0.74%
FTSE 250 17,641.90 +0.63%

FTSE 100 - Risers
Standard Chartered (STAN) 1,039.00p +1.96%
Sports Direct International (SPD) 732.00p +1.88%
Inmarsat (ISAT) 932.50p +1.86%
Sky (SKY) 1,056.00p +1.83%
Merlin Entertainments (MERL) 434.80p +1.80%
BHP Billiton (BLT) 1,270.00p +1.68%
ARM Holdings (ARM) 1,054.00p +1.64%
Weir Group (WEIR) 1,724.00p +1.59%
St James's Place (STJ) 920.00p +1.55%
Royal Bank of Scotland Group (RBS) 356.90p +1.54%

FTSE 100 - Fallers
Admiral Group (ADM) 1,376.00p -0.79%
Antofagasta (ANTO) 685.50p -0.58%
Tesco (TSCO) 211.35p -0.56%
Severn Trent (SVT) 2,077.00p -0.19%
Unilever (ULVR) 2,725.00p -0.18%
Morrison (Wm) Supermarkets (MRW) 180.50p -0.17%
Sainsbury (J) (SBRY) 264.90p -0.15%
Centrica (CNA) 263.60p -0.08%

FTSE 250 - Risers
Serco Group (SRP) 130.00p +10.17%
Betfair Group (BET) 2,485.00p +3.28%
Just Eat (JE.) 418.80p +2.95%
Enterprise Inns (ETI) 126.80p +2.26%
Supergroup (SGP) 1,256.00p +2.20%
Tullow Oil (TLW) 346.00p +1.85%
Ladbrokes (LAD) 132.20p +1.85%
Cineworld Group (CINE) 469.40p +1.84%
Brewin Dolphin Holdings (BRW) 297.10p +1.78%
Bellway (BWY) 2,414.00p +1.77%

FTSE 250 - Fallers
CLS Holdings (CLI) 1,800.00p -3.23%
Daejan Holdings (DJAN) 5,750.00p -2.54%
Computacenter (CCC) 757.50p -2.38%
Euromoney Institutional Investor (ERM) 1,194.00p -1.89%
Vectura Group (VEC) 176.10p -1.84%
Rank Group (RNK) 216.50p -1.72%
Nostrum Oil & Gas (NOG) 583.50p -1.52%
Just Retirement Group (JRG) 170.90p -1.44%
Thomas Cook Group (TCG) 134.90p -1.39%
Petra Diamonds Ltd.(DI) (PDL) 147.20p -1.14%