European markets up following Greek debt deal

European markets were up at market open on Friday morning, following the news that Greece yesterday reached a deal with international creditors, ending a period of uncertainty over whether it would default on its €7 billion debt.

The UK’s benchmark share index the FTSE 100 was up 0.36% at 7,446 points as of 08:32 a.m. BST (03:32 EST), after dropping to a low of 7,378.50 yesterday. Tesco is the day’s top gainer, up 1.36%, after the news that inflation has helped boost its sales, and reporting an increase in like-for-like UK sales this quarter of 2.3%, compared to the same quarter in 2016.

Global engineering group GKN were up 0.88%, while the morning’s biggest losers were equipment rental company Ashtead Group, down 1.25%, and BT Group, down 1.16%.

Here is the chart of the FTSE’s performance:

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FTSE 100, 16th June.
source
Investing.com

“A positive opening call comes as Asian bourses shrug off a negative close on Wall St where Tech had another bad session. Markets are welcoming positivity on the Greek debt front, offsetting that more hawkish Fed stance from mid-week, and deal well with ever present global geopolitical uncertainty,” said Mike van Dulken, head of research at Accendo Markets, in a statement.

The good news for Tesco has been driven by an increase in food sales, up 2.7%.

“Recovery is continuing at Tesco, despite the squeeze on consumer incomes from weak wage growth and rising inflation. The going is still tough though, as the sector is highly competitive and a rising pound will put pressure on supermarket margins, so it remains to be seen just how much those higher sales will feed through into profits,” said Laith Khalaf, senior analyst at Hargreaves Lansdown.

“Tesco is also facing the prospect of a rise in pension contributions because its scheme valuation is rather inconveniently taking place now, when interest rates are low and inflation is rising, both of which will serve to magnify the deficit. The supermarket is also in the process of compensating shareholders for the 2014 accounting scandal.”

The European markets experienced similar gains, with the DAX up 0.37% and the CAC 40 up 0.81%.

Here is the scoreboard:

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European markets, 16th June.
source
Investing.com