Markets remain rangebound as risk wanes

In mid-morning trading the FTSE 100 is clinging onto minimal gains as the showdown between Greece and Germany enters another round. 

City of London
Source: Bloomberg

Eurozone finance ministers meet today with Greece still centre stage. Germany’s rejection of Greece’s loan extension is hardly surprising as the two countries haven’t had the most cordial relationship lately. Greece was never going to get emerging funding for its banking system and a no-strings-attached loan extension in quick succession.

The game of cat and mouse between Germany and Greece continues, and the debt-stricken nation will have to compromise in order to get assistance from the European Centrla Bank. The eurozone equity market is being held back by the developments in Greece and will remain offside until a deal is brokered.

Shares in Standard Life are up 4% this morning after the Scottish life insurer revealed a 20% jump in operating profits. The Edinburgh-based company has been shifting its attention towards the asset management division and this helped cushion the sharp drop in annuity sales brought about by a change in government legislation. The company’s final dividend topped analyst estimates, and this does not include the special dividend announced on the back of the Canadian division being spun off.

As the FTSE 100 flirts with a 15-year high traders are seeking out bargains, and stocks such as Serco and Tullow Oil are being snapped up after both companies have been victims of short-selling recently.

Even though UK unemployment is falling and wage growth is on the rise it is not being reflected in the retail sector as UK retail data showed a contraction in January after a small increase in December. UK retailers are still finding it difficult to attract shoppers despite prices being slashed.

We are expecting the Dow Jones to open ten points lower as traders don’t want to be long on US index futures going into the weekend while the situation in Greece is still in focus. The US equity market has been drifting lower since the Federal Reserve voiced its concerns about worldwide growth; it says a lot about sentiment when the dovish update from the US central bank could not entice 

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