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LONDON (Alliance News) - UK shares are set to open lower, as EU finance ministers meet again Tuesday to discuss their new EUR80 billion bailout of Greece, whose leader, Prime Minister Alexis Tsipras, now faces the difficult task of selling the harsh terms of the deal back home.
The market's attention also will be on UK inflation numbers at 0930 BST, with most economists expecting the consumer price index to fall to zero in June from a 0.1% rise in May. Lloyds Bank, however, forecasts another 0.1% rise.
"While the ongoing strength of sterling will impart some downside inflationary pressure, this is likely to be offset by a 1% month-on-month rise in petrol prices and signs that the pace of price declines on the high street eased in June. Consequently, we have pencilled in another 0.1% year-on-year gain with the core rate remaining at 0.9%," says Jonathan Thomas, senior economist at Lloyds Bank.
IG says futures indicate the FTSE 100 to open 14.8 points lower at 6,723.2, having closed up 1.0% at 6,737.95 on Monday after Greece and its creditors said they came to an agreement on the nation's third bailout deal.
Athens is being asked to implement some reforms by Wednesday in an effort to restore trust between Greece and its creditors following five months of fraught bailout negotiations. Further reform pledges must follow.
Defence Minister Panos Kammenos, who leads the junior partner in Tsipras' governing coalition, said the prime minister faced a "coup" after being "blackmailed by the [prospect of a] collapse of banks and a total haircut on deposits."
Kammenos said his party, Independent Greeks (ANEL), supported the premier's efforts, but would decide Tuesday whether to back the bailout deal. Their opposition would likely not block its passage through parliament but would create a rift in the coalition.
"Tsipras faces possible mutiny within his own coalition government over the harsh terms of the country?s bailout," says Jasper Lawler of CMC Markets. "Headlines of infighting or hard-line stances within Athens will be a downside risk throughout the day."
If the Greek Parliament delivers, other national legislatures will be asked for their approval of the deal, a process that Eurogroup chief Jeroen Dijsselbloem hoped to complete by the end of the week.
In Asia on Monday, the Japanese Nikkei 225 closed up 1.5%. Meanwhile, the Hang Seng is down 1.2% and the Shanghai Composite is trading down 2.4%, looking set to end a run of three successive sessions of gains.
Wall Street ended higher Monday. The DJIA closed up 1.2% and the S&P 500 up 1.1% and the Nasdaq Composite closed up 1.5%.
Negotiators from Iran and six world powers were taking the last steps toward a far-reaching nuclear deal early Tuesday in Vienna, aiming to announce an agreement in the morning, several diplomats said. A Reuters report early Tuesday said a deal has been completed.
The prospect of a deal has weighed on oil prices and ahead of the open Brent oil trades at USD56.98 a barrel.
The total value of like-for-like sales in the UK was up 1.8% on year in June, the British Retail Consortium said on Tuesday. That topped forecasts for an increase of 0.5% following the flat reading in May. Overall sales were up 2.9% on year, the BRC said.
"We saw welcome signs of growing consumer confidence, with people more willing to 'trade-up' and spend a bit more on big-ticket purchases, likely boosted by the growth in the supply of credit and other factors such as low inflation and rising real incomes," BRC Director General Helen Dickinson said.
Also in the economic calendar Tuesday, ZEW economic surveys for the eurozone and Germany is at 1000 BST, alongside eurozone industrial production data. US retail sales are at 1330 BST.
Public transport company FirstGroup said it traded in line with its expectations in the first quarter of its current financial year, with continued growth in its UK rail business, but some more challenging conditions seen in its other units.
FirstGroup said it continued to see strong passenger revenue growth in its UK rail business in the quarter to the end of June, but said its UK bus arm has seen continued commercial passenger revenue growth offset by concessionary revenue, though it is making progress on its cost efficiency programme in the latter business.
FTSE 250-listed construction and facilities management company Carillion said it performed in line with its expectations in the first half of 2015 and said its forecasts for the full year remain unchanged.
The company said it has seen a significant year-on-year improvement in revenue in the half, with good progress made on contract mobilisations. It said it remains on track to deliver a robust rise in revenue for the full year and said its profit and earnings are both in line with its expectations.
International Public Partnerships said the Bazalgette Consortium, of which it is a part, has been named preferred bidder for the GBP4.2 billion Thames Tideway Tunnel Project in London. The FTSE 250-listed infrastructure investment company said it will invest GBP210 million in the project, with the rest of the risk capital to be funded by the other partners in the consortium.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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