London pre-open: Stocks to slide as Greece misses €300m payment

UK stocks were forecast to open on the back foot on Friday after Greece missed the €300m payment it was due to make to the International Monetary Fund (IMF).

City sources predict the FTSE 100 will open around 16 points lower than Thursday's close of 6,859.24, which marked a 1.3% drop on the day.

The troubled country has decided to pay its outstanding debt in one payment at the end of the month. Greek leaders continue to be locked in talks to reach an agreement on the terms of a deal that would unlock the last tranche of its bailout deal.

That comes ahead of the release of the latest US non-farm payrolls figures which are due to be are unveiled later on, as investors Stateside look for clues over the timing of the first rate hike by the Federal Reserve.

Economists estimate the US economy added 227,000 jobs in May compared to 223,000 in April. If their forecasts for more growth in jobs are met, it may help to cement expectations the Federal Reserve will start raising interest rates come September.

“Despite the bearish trading atmosphere as regards indices, the hammering the dollar is getting has helped the US futures hold back more excessive losses,” said Connor Campbell, financial analyst at Spreadex.

“It will be interesting to see how this situation manifests itself once the latest jobless claims and revised non-farm productivity data are released.

“Another high figure in the former should extend the dollar declines and therefore, in theory, push the Dow into the green.”
The unemployment rate is estimated to hold at 5.4% in May.

In company news, Lloyds Banking Group has been fined £117m by the Financial Conduct Authority for mishandling compensation payouts for mis-sold payment protection insurance. The bank said that it will reduce bonuses paid to staff by around £30m as a result.

Bellway said in an interim management statement that a strong trading performance was expected to result in the full year operating margin increasing by around 300 bps to over 20%, up from 17.2% in 2014. Exceptional profit will total £6.9m thanks to the disposal of the company's entire portfolio of shared equity assets for £32.5m. Its forward sales position was "strong", it said, with growth of 22% in the value of the forward order book to £1,270m.

Retailer Halfords reported group revenues of £1,004.9m, reaching its one billion pound target a year ahead of schedule, thanks in part to strong online retail sales. Earnings per share climbed 13.8%, net debt was reduced to £61.8m and the proposed full-year dividend per share was raised 15.4% to 16.5p.