FTSE CLOSE: Footsie tumbles again as Greek deadlock continues; US stocks flat despite upbeat consumer data

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17.35: The FTSE 100 closed down 99.50 points at 6520.98 with just hours to go before Greece misses a £1.1billion debt repayment to the IMF.

Investors were earlier blindsided by news that Greece is requesting a two-year bailout programme from the European Stability Mechanism, but it is unclear whether anything will come of this in time.

German and French markets finished in the red, but the Dow Jones was up 6.3 points at 17,602.6 after data showing an improvement in US consumer confidence.

No Grexit: AlexisTsipras has insisted that no matter what the outcome of this weekend's snap referendum on the Eurogroup's bailout package, Greece will not leave the euro

'Investors ducked for cover as a Greece-shaped curved-ball came hurtling towards them,' said Tony Cross of Trustnet Direct.

'Today's the deadline for the repayment of a €1.6billion International Monetary Fund loan and investors voted with their feet by deserting equities in preference for more safe haven assets such as the dollar, feeling that a default was a more likely outcome for Greece.

'The FTSE 100 was down, but that should be put into context of the rally which took the index to fresh highs earlier on this year.

'Loose monetary policy remains in place too, so while we can expect some turbulent times should Greece default and exit the eurozone it shouldn't be quite as cataclysmic as it might have been just a couple of years ago. But investors are still taking the "better safe than sorry" option.

'But there could still be another twist in the tail with some traders speculating that Greek Prime Minister Alexis Tsipras might strike a last-minute deal with European Commission President Jean-Claude Juncker.'

Chris Beauchamp of IG said: 'Greece is living in its final hours before passing into the unknown territory that lies beyond the bailouts of the past five years.

'It is a journey that even Jason and his Argonauts might balk at venturing on. Appropriately enough, at this late hour, Alexis Tsipras’ plane sits on the runway in Athens, waiting to take the Greek leader to another last-minute summit.

'Equity markets clearly believe that we will sail past the deadline tonight without any developments, as the mad game of brinksmanship that has dominated the news for so long enters its final hours.

'Greece has asked for a two-year extension to the ESM, but this would need approval from Germany, and jolting German MPs out of their afternoon naps is unlikely to win Athens many friends. The weekend referendum is still expected to yield a "yes" result despite the government’s plan to campaign for a "no" vote.'

The pound was a cent up on the euro at just under €1.41, after hitting a seven-and-a-half year high against the euro on Monday as worries about Greece defaulting on its debts and leaving the single currency took their toll. Sterling was flat against the US dollar at $1.57.

Supermarkets Tesco and Sainsbury's both fell by more than 2 per cent on the back of data by research group Kantar, which showed that their market shares fell as a result of the ongoing supermarket price war. Tesco was down 6.2p at 212.6p, while Sainsbury's was 8.9p lower to 265.3p.

Online grocer Ocado was up almost 4 per cent or 15.9p higher at 445.9p in the FTSE 250 even though investors were kept waiting once more for a long-awaited international tie-up, despite assurances from the group that it still hopes to strike a deal to sell its technology to an overseas retailer by the end of the year.

Floorings retailer Carpetright swung to a full-year profit on the back of strong UK trading and a turnaround of its continental stores. Shares lifted 3%, or 19.5p to 609p.

The biggest risers on the FTSE 100 were Hikma Pharmaceuticals up 47p at 1933p, Meggitt up 3.4p at 466.4p, Inmarsat up 4.5p at 915.5p and Persimmon at 9p at 1975p.

The biggest fallers on the FTSE 100 were BHP Billiton down 52.5p at 1249p United Utilities down 33.5p at 892p, Sainsbury's down 8.9p at 265.3p and Anglo American down 30p at 918.5p.

17.01: The FTSE 100 closed down 99.50 points at 6520.98. 

15.30: The Footsie dropped back further in late afternoon trade, despite an early bounce by US stocks, as a rally by European markets reversed on uncertainty about the situation in Greece ahead of a likely debt default and the ending of its current bailout deal tonight.

With an hour of trading to go in London, the FTSE 100 index was 63.7 points, or 1.0 per cent at 6,556.8, the session low and its worst level since late January

US stocks up: Despite the Greek uncertainties, the mood in New York was helped by some upbeat data, with consumer confidence jumping in June

In Europe, after briefly turning positive at lunchtime, the Dax 30 index in Frankfurt dropped 0.5 per cent, while Paris’s CAC 40 index shed 0.7 per cent, spooked by reports that Greece is requesting a two-year bailout program from the European Stability Mechanism, according to media citing the office of Greek prime minister Alexis Tsipras.

The ESM is Europe's permanent bailout fund. Such a proposal would come after talks between debt-burdened Greece and its creditors broke down over the weekend and the Greek prime minister called a snap referendum on the bailout conditions for July 5.

Earlier reports today, which had helped European markets rally, had indicated that European Commission President Jean-Claude Juncker had approached Tsipras about a marginally sweetened offer for Greece on Monday night and that talks could be revived.

Kathleen Brooks, research director UK EMEA at FOREX.com said the ESM move ‘throws a cat amongst the pigeons.’

She added: ‘The news that Greece has requested a 2-year bailout programme from the ESM office has come as a surprise to the market after we spent most of the morning accepting that Greece was going to default, but that everything would be ok if it did.’

‘This all adds up to even more uncertainty. The markets are taking the news gingerly, and there has been no positive impact from this event,’ Brooks continued.

‘We shall have to wait and see, one thing is for sure – 8 hours is a long time in this Greek crisis, and who knows what may happen ahead of the IMF deadline this evening.

‘Markets are probably right to wait on the side-lines until we get something solid out of the European authorities.’

But despite the Greek worries, US stocks managed to rebound after yesterday’s biggest sell-off of the year.

in early deals on Wall Street, the blue chip Dow Jones Industrial Average was up 53.0 points at 17,649.4, while the broader S&P 500 index added 6.5 points at 2,064.2, and the tech-laden Nasdaq Composite gained 21.9 points at 4,980.4.

The mood in New York was helped by some upbeat data, with US consumer confidence index jumping to 101.4 in June, from a downwardly revised 94.6 in May, according to the Conference Board, topping the economist consensus forecast of 97.5.

And the Chicago purchasing managers index rose to 3.2 points to 49.4 in June, off a 5-1/2-year low, although it remained below the 50 level which separates contraction from expansion. 

13.15: The Footsie remained weaker at lunchtime but eased off its session lows as European markets also rallied and US stock futures pointed to a bounce back today following a report that last-ditch efforts to revive talks between Greece and its creditors were under way.

By mid session, the FTSE 100 index was 29.8 points, or 0.5 per cent at 6,590.7, recovering from the session low of 6,558.64 but still near its lowest level since late January and extending losses after a 2 per cent drop yesterday.

Footsie down: The FTSE 100 index has fallen back to its lowest level since late January

European markets had turned mixed, with the Dax 30 index in Frankfurt up 0.1 per cent  and Paris’s CAC 40 index just down 0.1 per cent as traders speculated that Greek prime minister Alexis Tsipras might be willing to cut an 11th hour deal with European Commission President Jean-Claude Juncker.

Global markets have been rattled as a standoff between Greece and its lenders has intensified, with Greece just hours away from defaulting on a €1.6billion loan and at risk of sliding out of the euro zone.

Greek prime minister Alexis Tsipras has broken off negotiations with the European Commission, the IMF and the European Central Bank and announced a referendum on the country's bailout terms on July 5, giving voters just one week to debate the fundamental issues at stake.

US stocks had their worst day of the year yesterday after the Greek saga took another negative turn, but with both the blue chip Dow Jones Industrial Average and broader S&P 500 index both having lost all their gains for the year, the indices are expected to rally a touch today.

On currency markets, the pound was a cent higher against the euro, at just under €1.41, after hitting a seven-and-a-half year high against the single currency on Monday as worries about Greece defaulting on its debts and leaving the single currency took their toll.

Sterling was flat against the US dollar, at $1.5715, slipping back from its intraday high of $1.5746 hit after data showed Britain's economy grew more strongly than thought in the first three months of the year at 0.4 per cent.

But the pound was unsettled by comments from the Bank of England’s chief economist Andy Haldane saying the bank should steer clear of an early interest rate hike, and was as likely to cut rates as to raise them in future.

Later on in the day, investors will get the chance to hear the latest views from another BoE rate-setter, Paul Fisher.

Among stocks, supermarkets Tesco and Sainsbury's both fell by more than 2 per cent on the back of data by research group Kantar, which showed that their market shares fell as a result of the ongoing supermarket price war.

Tesco was down 5.5p at 213.3p, while Sainsbury's was 5.9p lower to 268.3p.

Online grocer Ocado was 1 per cent or 5.6p lower at 424.4p in the FTSE 250 as investors were kept waiting once more for a long-awaited international tie-up, despite assurances from the group that it still hopes to strike a deal to sell its technology to an overseas retailer by the end of the year.

Half-year figures showed Ocado's underlying earnings rose 11.4 per cent to £38.2million in the 24 weeks to May 17 on sales 15.7 per cent higher.

Floorings retailer Carpetright swung to a full-year profit on the back of strong UK trading and a turnaround of its continental stores.

The Essex-based firm, which has 460 UK shops, saw it underlying pre-tax profit jump almost three times to £13million in the 53 weeks to May 2, as the group put a series of previous profit warnings behind it.

Carpetright's statutory pre-tax profit was £6.6million for the period, against a loss of £7.2million. Shares jumped 6 per cent, or 33.5p higher to 623p.

10.30: The Footsie stayed depressed as the morning session progressed, tracking further heavy losses by European markets as Greece looks set to miss a €1.6billion (£1.1billion) payment in the country's escalating debt crisis today, with news of a revision of Britain’s first quarter growth failing to provide any support.

By mid morning, the FTSE 100 index was down another 61.9 points, or 0.9 per cent to 6,551.6, extending yesterday's 2 per cent decline, while the Dax 30 index in Germany and France's CAC 40 index both fell a further 1.1 per cent after plunging nearly 4 per cent on Monday.

US stocks yesterday had their worst day of the year after the Greek saga took another turn, with the country's banks shutting their doors as it prepares for a referendum that will effectively decide whether to stay in the euro.

In happier days: Traders are speculating that Greek prime minister Alexis Tsipras (pictured left) might be willing to cut an 11th hour deal with European Commission President Jean-Claude Juncker (right)

Athens looks likely to default on its payment to the International Monetary Fund by today's 10pm deadline, with its current bailout also expiring at the same time.

Greece has been in talks for months with its three creditors - the IMF, the European Central Bank and the European Commission – to arrange a new bailout but has failed to reach a deal on the reforms required by its lenders.

The stricken country has closed its banks for a week and will see voters on Sunday decide on the latest deal put forward by its creditors. Greek prime minister Alexis Tsipras has urged the country to vote against austerity proposals, but EU leaders have warned that rejection would mean Greece leaving the eurozone.

On currency markets, the pound trimmed earlier losses versus the dollar, turning flat at $1.5726 after data showing that Britain's economy grew more strongly than previously thought in the first quarter, while households' disposable income rose at the fastest annual pace since 2001.

The Office for National Statistics said its final reading showed the UK economy grew 0.4 per cent in the first quarter, revised up – as expected - from an initial estimate of 0.3 per cent.

The ONS also revised up year-on-year growth to 2.9 per cent from 2.5 per cent, a much stronger increase than economists had expected.

Dennis de Jong, managing director at UFX.com said: ‘Although much better than expected, the healthy rise in GDP won’t distract Chancellor George Osborne too much from the ongoing saga in Athens. The figures, however, will be welcome and they may kick start the debate in earnest over when interest rates should be raised by the Bank of England.’

Meanwhile the euro remained weak on Grexit worries, with the single currency falling to €1.1160 versus the dollar and to €1.4084 against the pound, failing to be helped by some cautiously positive eurozone inflation data today.

The preliminary estimate for the region’s consumer prices index showed a rise of 0.2 per cent year-on-year in June, in line with expectations but slightly down from 0.3 per cent in May.

Among equities, heavyweight mining stocks were a drag as investors risk appetite waned again, with cautious sector comment from Deutsche Bank also having an impact, with the broker cutting back target prices for a number of players.

The world’s biggest miner, BHP Billiton shed 22.5p at 1,279.0p, while Anglo American lost 15.0p at 933.5p, and Antofagasta fell 13p to 692p.

Rio Tinto was also weak, but only lost 20.5p at 2,671.0p after a report in the Financial Times said that Xstrata's former boss Mick Davis was in ‘serious’ talks about buying some of the firm's Australian coal assets.

Mid cap Indian miner Vedanta Resources suffered the most, down 6.7 per cent or 37.5p to 520.0p after Deutsche Bank cut its rating to hold from buy with a reduced target price to 610p, down from 800p.

Also on the move after broker comment, contract caterer Compass Group shed 6p at 1,067p after Societe Generale cut its rating to sell from hold.

Global banking giant HSBC was also in the red after Goldman Sachs downgraded its rating to neutral, with its shares off 2.0p at 575.1p.

And insurer and fund manager Standard Life shed 7.8p at 450.6p after analysts at RBC downgraded their stance to underperform from sector perform.

There were few blue chip gainers once again, but travel stocks edged higher after suffering steep losses yesterday on the back of fears about the impact on tourism from the Greek crisis and the recent terrorist attacks in Tunisia. EasyJet rallied 11p higher to 1,555p, and IAG added 2.6p at 495.8p.

On the second line, online grocer Ocado fell 3 per cent or 14.9p lower to 415.1p as investors were kept waiting once more for a long-awaited international tie-up, despite assurances from the group that it still hopes to strike a deal to sell its technology to an overseas retailer by the end of the year.

Ocado’s half-year figures showed underlying earnings rose 11.4 per cent to £38.2million in the 24 weeks to May 17 on sales 15.7 per cent higher.

And commercial van hire group Northgate dropped 6.6 per cent, or 41.0p lower to 577.5p after underwhelming with its annual results, as it posted a 41 per cent increase in underlying profits to £85million and hiked its dividend by 45 per cent.

Broker Numis Securities said while trading was ‘solid’, it had lowered its rating for Northgate to hold from add due to less upside risk. 

09.05: The Footsie fell back in early morning trading, extending yesterday’s sharp falls in tandem with European markets as Greece is expected to finally default on its debt repayments today as its current bailout deal with the Eurogroup runs out and ahead of this weekend's crucial referendum.

After an hour of trading, the FTSE 100 index was down 48.4 points, or 0.7 per cent at 6,572.1, having dropped 133.22 points yesterday, with a steady showing in Asia thanks to a rally by Chinese stock markets ignored.

In Europe, the Dax 30 index in Frankfurt and the CAC 40 index in Paris both fell 0.9 per cent as the Greek situation continued to spook investors, with €1.6billion of debt repayments due by the country to the International Monetary Fund today.

Markus Huber, senior sales trader/senior analyst at Peregrine & Black said: ‘Markets are under pressure as investors continue to reduce their risk exposure ahead of this Sunday’s decisive referendum.

‘In case of a vote against additional austerity measures and structural reforms the likelihood of Greece being able to remain in Euro appears slim.

‘Even as Greek Prime Minister Tsipras insists that no matter what the outcome of the referendum will be that Greece will not leave the Euro in the end with banks and the government possibly being on the brink of bankruptcy should the outcome of the referendum close the door to any new bailout money, Greece might not have much of a choice then to revert back to the Drachma after all.‘

He added: ‘Markets are likely to be range-bound, with individual moves being driven once again by government and central bank officials commenting on Greece. Additionally rallies are seen as selling opportunities as plenty of uncertainty remains and traders remaining risk averse.

Investors were also nervous ahead of today’s final revision to UK first quarter growth estimates, with GDP expected to be revised upwards to 0.4 per cent, from an initial reading of 0.3 percent.

On currency markets, the pound remained stronger across an embattled euro at €1.4066 as Grexit worries dominate, although against the dollar sterling slipped again to $1.5715.

The pound was knocked by dovish comments from the Bank of England’s chief economist saying the bank should steer clear of an early interest rate hike, and is as likely to cut rates as to raise them in future.

Andy Haldane said recent strong wage data had not changed his view from earlier in the year about the dangers of tightening policy too soon, adding that a drag on growth from sterling strength could outweigh the gains from higher wages.

Haldane's comments in an advance copy of a lecture he plans to give on Tuesday contrast with those of other BoE policymakers, such as Martin Weale, who view stronger wage growth as a sign that interest rates may need to rise sooner rather than later.

Stocks in focus in London include:

OCADO – The online grocer reported an 11.4 per cent rise in first half core earnings and reiterated its target of signing a first agreement with an overseas retailer during 2015. Shares drop 4 per cent, or 18.4p at 411.6p having posted strong gains yesterday on reports an overseas deal could be announced today.

RIO TINTO - Former Xstrata boss Mick Davis' X2 Resources is in ‘serious’ talks to purchase some of Rio Tinto Plc's Australian coal assets, the Financial Times reported citing people familiar with the matter. Rio shares fall 12.0p at 2,679.5p.

HIKMA – The blue chip firm has emerged as a bidder for German drugmaker Boehringer Ingelheim's generics unit Roxane Labs, Bloomberg reported, citing people familiar with the matter. Shares flat at 1,886p.

COMPASS GROUP – The contract caterer was a top FTSE 100 faller as French broker Societe Generale downgraded its rating to sell to hold. Shares shed 17p at 1,056p.

ADMIRAL GROUP – The motor insurer has struck a connected-car deal which will mean it will be able to generate video footage of a crash using Google Earth within minutes of the accident happening, despite no camera being present in the car, the Financial Times reported. Shares fall 18p to 1,375p.

NORTHGATE – The FTSE 250 commercial light vehicle rental company said pretax profit surged in its 2015 financial year as revenue rose across both hire and sale business, prompting the company to hike its dividend payout by nearly half. But shares dropped 7 per cent. But shares dropped 6 per cent, or 38.5p to 580.0p.

IMAGINATION TECHNOLOGIES – The chip maker, whose products are used in Apple devices, said it expects to see a rise in profitability in 2016, despite posting a wider pretax loss for the year to 30 April of £11.95m, up from £314,000 last year. Total revenue rose to £177.02m from £170.84m. Imagination shares gained 5 per cent, or 11.5p at 227.0p.

CARPETRIGHT – The floor coverings retailer made a profit in its recently-ended financial year, having suffered a loss the prior year, as revenue growth in the UK offset a decline in the rest of Europe, but like-for-like sales rose in both divisions. Shares gain 21.5p at 611.0p.

PLUS500 – The financial trading platform company said 13,499 of its UK customers' balances had been unfrozen. Shares flat at 389.75p.

KIER – The engineering group said that the underlying trading performance for all four of its divisions for the year to 30 June 2015 has remained in line with management’s expectations, and the integration of Mouchel is going well. Shares down 8p at 1,409p.

BLINKX - The Internet media group said its chairman Anthony Bettencourt will be stepping down, to be replaced by Raj Chellaraj. Shares add 0.25p at 27.75p.

SIRIUS MINING - Shares in the company have been suspended from trading at its own request ahead of an expected planning decision on its proposed potash mine in the North York Moors National Park. Stock frozen at 15p.

COLT GROUP – The telecommunications and IT services provider has outlined its new business plan to ‘refocus’ its activities and improve its performance, but said it expects to book heavy exceptional costs in relation to the plan Shares up 2p to 190p.

07:55: The Footsie is to open around 30 points lower this morning, extending yesterday’s sharp falls as events in Greece continue to dominate, with the country expected to default on repayments due to the International Monetary Fund today as its current Eurogroup bailout deal runs out.

The FTSE 100 index closed a hefty 133.22 points lower yesterday at 6,620.48 as European markets made even bigger falls.

US stocks tumbled overnight, with the Dow Jones Industrial Average dropping 350.33 points to 17,596.35, although Asian markets were a bit steady thanks to a rebound by volatile Chinese shares.

Protesters carrying signs and banners reading Oxi! ó Greek for No! as the country prepares for an upcoming referendum on Sunday July 5 on whether or not to accept the demands of Greece's international creditors

Stocks in China rallied more than 5 per cent in afternoon trading after falling nearly 5 per cent early on, as the Beijing government and regulators stepped up efforts to prevent a plunge of 20 per cent over the last few weeks from inflicting further damage on the country’s already slowing economy.

Last weekend, China cut interest rates and lowered reserve requirements to stabilise markets - a rare combination not seen since the depths of the 2008 financial crisis.

But gains were capped in Asia by fears that European markets could go into freefall again today as investors nervously await further developments in the deepening Greece crisis ahead of next weekend’s snap referendum on the Eurogroup’s new bailout conditions.

Michael Hewson, chief market analyst at CMC Markets UK said: ‘With the next pressure point coming up later today with the deadline for the €1.5bn repayment to the IMF likely to pass without payment, attention is now shifting to the likely next steps that the ECB might take with respect of the ELA.

‘If non-payment were to happen, which seems likely then Greece would simply be in arrears, not default, despite (IMF boss) Christine Lagarde’s earlier claims to the contrary.

‘In a sign that battle lines continue to be drawn EU leaders have turned Sunday’s proposed referendum into an in/out vote on Greece’s position in the euro, when it is clearly about the creditors proposal, but given that polls appear to suggest a majority of the Greek population would prefer to stay in the euro, it suits the narrative of the EU to peddle that particular line.’

He added: ‘Whatever the rights and wrongs of the Greek government’s position, what is playing out here is clearly a last throw of the dice in a high stakes game of chicken, with Greek Prime Minister Alexis Tsipras appearing to hint that he and his government would step down if Sunday’s referendum went against them.’

While the headlines in Greece will continue to dominate, some important UK economic data will be released today, with the final reading for first quarter GDP, as well as eurozone unemployment data and the region’s latest June flash inflation data.

CMC’s Hewson said: ‘Given some of the recent positive adjustments to some of the March numbers it would be surprising if today’s final revision of UK Q1 GDP weren’t revised upwards to 0.4 per cent, indicating that after a slow start to the year the economy may well remain fairly steady, if slightly unspectacular. ‘

Data released overnight showed UK consumer confidence has soared to its highest level for more than 15 years in the wake of the General Election.

Research group GfK said its index measuring how British households feel about their finances and the economy jumped six points to seven this month – the highest reading since January 2000.

On the corporate front, results from online grocer Ocado, and floorings retailer Carpetright should attract the most attention. 

UK company news scheduled today includes:

Finals: Carpetright, Imagination Technologies Group , Northgate, Sweett Group, Plastics Capital, Parrallel Media, Independent Oil & Gas. Pinewood Group, Creightons

Interims: Ocado, St Modwen Properties, eServ Global, Sula Iron & Gold

Trading update: James Fisher

Economic news scheduled today includes:

UK final Q1 GDP reading at 9.30am

UK current account figures at 9.30am

eurozone flash CPI at 10am

Eurozone unemployment at 10am

US Chicago PMI at 2.45pm