London midday: Stocks hold near highs as traders monitor Greek situation

There was uncertainty early on Friday over how European leaders would react to the concessions made by Greece in exchange for a £38.56bn (€53.5bn) rescue programme.

Those worries were quickly dispelled when come mid-morning Bloomberg reported that Eurogroup president Jeroen Dijsselbloem had said an agreement on Greece was possible that same evening.

As of 11:54 the Footsie was up by 74.07 points to 6,655.53. The second tier FTSE 250 gained 135.26 points to 17,431.00 and the FTSE Small Cap index was up by 37.78 points to 4,674.28.

On other side of the channel, the DJ Euro Stoxx 50 was rising by 2.81% to 3,516.26 points as government bonds in the periphery advanced.

The yield on the benchmark 10-year Italian government bond was down by 14 basis points to 2.03%. The yield on similarly-dated Gilts was up by nine basis points to 2.05% as the safe-haven bid they enjoyed over the last few sessions evaporated.

Significantly, 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, there appeared to continue to be opposition within Germany to any outright debt forgiveness, as opposed to lower interest payments and the extension of debt maturities.

"A deal on Greece is likely this weekend. The hard proposals now square well with creditors’ requests. Political developments have also moved in favour of a deal, with strong support from creditor countries (France, Italy, IMF/US)," RBS's Alberto Gallo said on Friday morning in a research report e-mailed to clients.

"This is now the most likely scenario, by far, in our view. The latest reform proposals by Greece are on the table, and get very close to the creditors’ demands."

Chinese stocks jump, auto sales slump

The Shanghai stock exchange rose 4.54% overnight to end the day at 3,877.80 points, for its biggest two-day advance since September 2008. In Shenzhen, 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.

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 Group 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.

Fidelity China Special Situations was higher by 8.11%, tracking the overnight rise in Chinese shares.

Shares in Lonmin led fallers on the second-tier index after UBS told clients that they: “still expect precious group metal prices to recover from currently depressed levels. However we are concerned that cash flow generated by Lonmin from an eventual increase in PGM prices will be used to increase capex, as it seeks to restore the asset base post several years of underspending.”

Market Movers
techMARK 3,141.26 +0.65%
FTSE 100 6,650.03 +1.04%
FTSE 250 17,426.76 +0.76%

FTSE 100 - Risers
Standard Life (SL.) 448.00p +3.23%
InterContinental Hotels Group (IHG) 2,683.00p +2.95%
International Consolidated Airlines Group SA (CDI) (IAG) 528.00p +2.62%
Sports Direct International (SPD) 724.00p +2.48%
Aberdeen Asset Management (ADN) 399.80p +2.46%
Marks & Spencer Group (MKS) 533.00p +2.40%
London Stock Exchange Group (LSE) 2,521.00p +2.40%
easyJet (EZJ) 1,672.00p +2.39%
Unilever (ULVR) 2,885.00p +2.34%
Legal & General Group (LGEN) 262.90p +2.22%

FTSE 100 - Fallers
Weir Group (WEIR) 1,602.00p -0.81%
ARM Holdings (ARM) 1,037.00p -0.77%
Randgold Resources Ltd. (RRS) 4,167.00p -0.36%
Bunzl (BNZL) 1,751.00p -0.06%

FTSE 250 - Risers
Fidelity China Special Situations (FCSS) 140.00p +8.11%
Premier Oil (PMO) 147.50p +5.73%
Auto Trader Group (AUTO) 317.90p +4.85%
Zoopla Property Group (WI) (ZPLA) 239.00p +3.91%
Shawbrook Group (SHAW) 348.70p +3.69%
Laird (LRD) 365.50p +3.54%
Ocado Group (OCDO) 454.90p +3.53%
Fidelity European Values (FEV) 181.90p +3.35%
Brewin Dolphin Holdings (BRW) 299.50p +3.20%
Jimmy Choo (CHOO) 164.90p +3.06%

FTSE 250 - Fallers
Lonmin (LMI) 85.40p -8.07%
Greggs (GRG) 1,131.00p -1.39%
esure Group (ESUR) 261.60p -1.25%
Virgin Money Holdings (UK) (VM.) 381.50p -1.17%
Mitchells & Butlers (MAB) 435.50p -1.16%
Centamin (DI) (CEY) 60.30p -1.15%
Evraz (EVR) 112.40p -1.14%
CLS Holdings (CLI) 1,800.00p -1.10%
IP Group (IPO) 199.00p -0.99%
Domino's Pizza Group (DOM) 765.00p -0.91%