London open: Stocks track gains in Europe, China

The relief rally in British stocks gathered pace after Greece made concessions to its creditors overnight in exchange for a £38.56bn (€53.5bn) rescue programme, although some analysts and government officials were cautious.

As of 08:55 the Footsie was up by 51.89 points to 6,633.59. The second tier FTSE 250 gained 133.37 points to 17,429.01 and the FTSE Small Cap index was 18.76% higher at 4,668.58.

On other side of the channel, the DJ Euro Stoxx 50 was rising by 2.54% to 3,506.93 points as government bonds in the periphery advanced. The yield on the benchmark 10-year Italian government bond was down by 15 basis points to 2.03%.

Nonetheless, the euro failed to make any gains against sterling, possibly in a reflection of traders’ caution.

Significantly, Germany reportedly conceded that the Mediterranean country will need some degree of debt relief.

German finance minister Wolfgang Schaeuble was cited as having said that Greece’s debt was not sustainable without debt relief, adding later that the IMF was ‘right’ to have pointed this out.

Nevertheless, other reports also indicated that officials in Berlin were highly sceptical.

“Whatever the reason, these latest proposals could potentially be a strong leap forward, assuming the institutions don’t find they are filled with holes, which they have on numerous occasions in the past,” wrote Craig Erlam, senior market analyst at Oanda, in a research note e-mailed to clients.

On Thursday, RBS strategist Alberto Gallo had said: “There is some complacency in bond markets vis-a-vis a Grexit. To think that Grexit would be an isolated event, or that Greece would thrive with the Drachma, is somewhat naïve.”

Chinese stocks jump, auto sales slump

The Shanghai stock exchange rose 4.54% to end the day at 3,877.80 points, for its biggest two-day advance since September 2008. In Shenzhen, the startling fact that a grand total of zero stocks fell, while 733 rose. All but 21 of them rose more than 9%.

However, figures published on Friday morning revealed that Chinese automobile production shrank in June for the first time ever.

Elsewhere for macro data hunters, the UK's Office for National Statistics will release its figures for the UK’s visible trade balance in May at 09:30.

IAG gets ‘all-clear’ for Aer Lingus bid

RyanAir’s board has voted to approve IAG’s offer for its stake in Aer Lingus. Ryanair noted that its stake in Aer Lingus has been available for sale since May 2012 and said the current offer, which is made up of €2.50 per Aer Lingus share and a dividend of €0.05 per share, maximises Ryanair shareholder value.

Hammerson has agreed to sell its interest in Grand Maine shopping centre to a French institutional investor for €63.2m. The company said this disposal, along with the recent sale of Bercy 2, Paris, represents an opportunity to take advantage of strong investor demand for retail real estate assets and achieve good pricing ahead of book value.

Intercontinental Hotels has sold its five-star Hong Kong hotel for US$938m cash to a consortium of investors, but will retain a 37-year management contract on the building, with three 10-year extension rights.

Societe Generale initiated coverage of Croda with a ‘buy’ rating and 3,050p price target. It said Croda has suffered from stagnating consumer spending in mature markets over 2012-2014, resulting in virtually no sales growth. However, since the third quarter of 2014, consumer sentiment/innovation rates have started to pick up again, resulting in an underlying sales growth run rate of 3- 4%.

Medical technology company Smith & Nephew announced the acquisition of the trauma and orthopaedics business of Deost LLC and DC LLC, a manufacturing company that has distributed S&N’s products in Russia since 2009.

Market Movers
techMARK 3,143.55 +0.72%
FTSE 100 6,648.93 +1.02%
FTSE 250 17,420.32 +0.72%

FTSE 100 - Risers
InterContinental Hotels Group (IHG) 2,691.00p +3.26%
Standard Life (SL.) 445.00p +2.53%
BHP Billiton (BLT) 1,235.50p +2.45%
International Consolidated Airlines Group SA (CDI) (IAG) 526.50p +2.33%
Vodafone Group (VOD) 235.30p +2.28%
Babcock International Group (BAB) 1,098.00p +2.23%
London Stock Exchange Group (LSE) 2,516.00p +2.19%
Sports Direct International (SPD) 722.00p +2.19%
Barratt Developments (BDEV) 633.50p +2.10%
Unilever (ULVR) 2,875.00p +1.99%

FTSE 100 - Fallers
ARM Holdings (ARM) 1,038.00p -0.67%
Weir Group (WEIR) 1,609.00p -0.37%

FTSE 250 - Risers
Fidelity China Special Situations (FCSS) 135.20p +4.40%
Premier Oil (PMO) 145.30p +4.16%
Zoopla Property Group (WI) (ZPLA) 238.90p +3.87%
Ocado Group (OCDO) 455.90p +3.76%
Vedanta Resources (VED) 471.70p +3.67%
Fidelity European Values (FEV) 182.00p +3.41%
Just Eat (JE.) 408.00p +2.95%
Petrofac Ltd. (PFC) 872.50p +2.47%
OneSavings Bank (OSB) 293.50p +2.26%
Auto Trader Group (AUTO) 309.80p +2.18%

FTSE 250 - Fallers
Clarkson (CKN) 2,736.00p -1.05%
Cranswick (CWK) 1,594.00p -0.93%
Lonmin (LMI) 92.05p -0.92%
Just Retirement Group (JRG) 174.00p -0.91%
Synthomer (SYNT) 303.60p -0.69%
Dechra Pharmaceuticals (DPH) 978.50p -0.66%
Balfour Beatty (BBY) 218.90p -0.59%
UK Commercial Property Trust (UKCM) 89.50p -0.56%
Nostrum Oil & Gas (NOG) 598.00p -0.50%
Polymetal International (POLY) 496.00p -0.48%