FTSE CLOSE: Footsie ticks back up as US stocks post early gains, but Greek debt worries remain

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17.20 (close): The London market made little headway today after a run of poor economic figures in the US provided a drag on a number of decent corporate updates.

A quiet day on the markets may be tested tomorrow as projections suggest inflation could slip into negative territory for the first time since 1960, according to official figures.

But today Marks & Spencer traded strongly ahead of the company's results on Wednesday as the FTSE 100 Index closed 8.4 points higher at 6968.9.

Choppy trade: On Wall Street, the Dow and the S&P 500 indexes recorded fresh all-time highs in opening deals today, but they soon eased back on some profit taking with Federal Reserve minutes eyed

Silver miner Fresnillo and support services group Babcock International were among stocks that also performed well after impressing investors with their latest guidance.

The uncertain performance for European markets reflected concerns about the economic outlook, particularly in the wake of poor figures in China and disappointing US industrial production data before the weekend.

The pound was a cent higher against the euro at 1.38, after Greece said it needed a deal with its bailout lenders by the end of the month to avoid running out of money. Sterling was down slightly against the dollar, at just under 1.57.

Mexico's Fresnillo was the biggest riser in the FTSE 100 Index - up more than 5 per cent or 40.5p to 792.5p - after it said it was on track to meet production targets for the current financial year.

And Babcock International, which employs 26,000 people across a range of sectors including defence, energy and transport, rose almost 3 per cent or 30p to 1111p after posting a 43 per cent rise in full-year profits to £313.1million.

It also announced a 10 per cent rise in dividend and said its £20billion order book and bid pipeline meant there were 'significant further opportunities' for growth.

M&S shares were higher - up 2 per cent or 13p to 581p - amid forecasts that it will report its first improvement in annual results in four years.

Analysts expect the retailer to post full-year pre-tax profits up 4 per cent to £648million, after its key clothing division registered its first rise in sales last month following 14 consecutive quarters of decline.

Lloyds Banking Group shares were under pressure after Investec Securities downgraded the stock to sell from hold and said it may be as 'good as it gets' for the bank after shares soared to a six-year high in the wake of a recent trading update and the result of the general election.

Shares were 0.9p lower at 88.1p in a session when Barclays was flat at 261.5p and Royal Bank of Scotland added 0.5p to 351.3p.

Outside the top flight, shares in gaming firm Bwin.party jumped almost 9 per cent - up 8.6p to 108p - as rival 888 Holdings confirmed its interest in a takeover bid.

Bwin.party has some of the world's biggest online gaming brands, including partypoker, partycasino and FoxyBingo. Shares in 888 Holdings were down 2.8p to 167p.

The biggest risers on the FTSE 100 Index were Fresnillo up 40.5p at 792.5p, Sage up 17.5p at 561.5p, Royal Mail up 13.6p at 499p, Babcock International up 30p at 1111p.

The biggest fallers on the FTSE 100 Index were BHP Billiton down 70p at 1463p, Hikma Pharmaceuticals down 30p at 2071p, Aviva down 7.5p at 535p and easyJet down 22p at 1678p.

15.15: The Footsie ticked back into positive territory in late afternoon trade, having reversed earlier gains due to Greek debt default fears and worries over global growth, as US stocks notched up tentative opening gains

With an hour and a quarter of trading to go in London, the FTSE 100 index was up 1.1 points at 6,961.6, albeit still well below the session peak of 7,015.49 and the record high of 7,122.74 reached in late April.

European markets were mixed, with the Dax 30 index in Frankfurt ahead 0.8 per cent, but Paris's CAC 40 index down 0.2 per cent.

On Wall Street, both the Dow and the S&P 500 indexes recorded fresh all-time highs in opening deals today, but they eased back on some profit taking after data showed confidence among US home builders declined two points to 54 in May, according to the National Association of Home Builders/Wells Fargo index, below economists forecasts for a reading of 58.

After half an hour of trading, the blue chip Dow Jones Industrial Average was up 2.3 points at 18,274.9, with the broader S&P 500 index ahead 0.7 points at 2,123.4, and the tech-laden Nasdaq Composite added 1.5 points at 5,049.8.

No other important US data was released today so, after a run of recent weak pointers, investors were content to stay close to the sidelines ahead of this week's main event – minutes from this month's Federal Reserve meeting, due on Wednesday evening.

Jasper Lawler, market analyst at CMC Markets said: 'Economic data in the two weeks since the last Fed meeting has continued to deteriorate. First quarter growth estimates are likely to be revised lower and Q2 is having a slow start, implying the cause is not just winter weather. Retail sales, producer price inflation data, industrial production and consumer sentiment all missed expectations.

'In the Fed's last meeting it rightfully downgraded its view on the economy but still implied a rate hike could happen as early as June. It seems pretty unlikely now that the Fed would risk a move in June but depending on the minutes, September could still be on.

'A determination to hike rates despite the poor data could rattle markets, but given the minutes are two-weeks old, investors may just look through them,' he added.

12.45: The Footsie turned cautious at lunchtime, reversing earlier gains as Greek default fears and worries over global growth offset the benefit of a higher oil price and some corporate updates.

By mid session, the FTSE 100 Index was 28.3 points, or 0.4 per cent lower at 6,932.2, dropping back sharply from an early session peak of 7,015.49 as a push up to the record high of 7,122.74 reached in late April stalled.

European markets were also lower, with Paris's CAC 40 index down 1.2 per cent, and the Dax 30 index in Frankfurt off 0.5 per cent, while the Athens benchmark fell 0.7 per cent.

Reversal: After earlier gains, the FTSE 100 index dropped back in lunchtime trade in tandem with European markets as fears over a Greek debt default increased

A spokesman for the Greek government said today that the country will be able to pay wages and pensions in May but needs a deal with its lenders by the end of the month 'so we can resolve our liquidity issues'.

Gabriel Sakellaridis told a news conference that Athens also was sticking to 'red lines' in its continued cash-for-reforms negotiations with creditors.

Connor Campbell, financial analyst at Spreadex said: 'News that Greece is hoping to reach a deal by the end of May acquired a bitter aftertaste due to the country's sustained lack of compromise over its so-called 'red lines', something that may come back to haunt Greece with a beyond-tense June to come.'

The uncertain performance for European markets also reflected concerns about the economic outlook, particularly in the wake of poor jousting figures in China and disappointing US industrial production data before the weekend.

On currency markets, the pound fell back against a broadly stronger dollar to $1,5675, losing some of its post-election shine having posted its best performance in six years against the US currency in the past two weeks.

With Chancellor George Osborne announcing on Friday he would spell out on July 8 how he plans to make further big cuts to public spending, investors are becoming concerned that such austerity will see the Bank of England hold off from raising interest rates for longer.

On Wednesday, they will get another look into the bank's thinking, when minutes from this month's Monetary Policy Committee meeting are released. Ahead of that the latest UK inflation data will be released tomorrow.

Against the euro, however, which was weaker across the board, the pound was up at 72.575p.

Among equities, generic drugmaker Hikma Pharmaceuticals was a big blue chip faller, down 46p at 2,055p after the Jordan-based company said its founder and major shareholder Samih Darwazah had died on Friday, aged 85

Darhold, the holding company through which the Darwazah family & other founding shareholders hold their interests has a near 29 per cent stake in Hikma, with Samih Darwazah's holding at an additional 1 per cent.

Mexican silver miner Fresnillo remained the biggest FTSE 100 riser, up 4 per cent or 28p to 780p, after it said it was on track to meet production targets for the current financial year.

Precious metals peer Randgold Resources was also higher, up 71p at 4,939p helped by a firmer gold price.

In other corporate news, Babcock International, which employs 26,000 people across a range of sectors including defence, energy and transport, rose 2 per cent or 23.5p to 1104.5p after posting a 43 per cent rise in full-year profits to £313.1million.

It also announced a 10 per cent rise in its dividend and said its £20billion order book and bid pipeline meant there were 'significant further opportunities' for growth.

M&S shares were also higher - up 2 per cent or 11.25p to 579.25p - amid forecasts that it will report its first improvement in annual results in four years on Wednesday

Analysts expect the retailer to post full-year pre-tax profits up 4 per cent to £648million, after its key clothing division registered its first rise in sales last month following 14 consecutive quarters of decline.

But Lloyds Banking Group shares were under pressure after broker Investec Securities downgraded the stock to sell from hold and said it may be as 'good as it gets' for the bank after shares soared to a six-year high in the wake of a recent trading update and the result of the general election.

Lloyds shares were 1.0p lower at 88.1p in a session when Barclays was flat at 261.5p and Royal Bank of Scotland added 0.3p to 352.1p.

Other financials were also in the red, with insurer Aviva shedding 10.5p at 532.0p, and wealth manager St James's Place dropping 12.5p at 931.5p. 

10.00: The Footsie pushed higher as the morning session progressed supported by a rise in energy stocks as oil prices advanced, although it drifted off its best levels in the absence of much else for direction and with Greek debt default worries remaining a drag.

By mid morning, the FTSE 100 index was up 34.3 points, or 0.5 per cent to 6,994.7, albeit slipping back from an early high of 7,015.49 as a push up to its record high of 7,122.74 reached in late April stalled.

European markets were firmer too, with France's CAC 40 index up 0.3 per cent, while the Dax 30 index in Frankfurt gained 1.1 per cent.

Oil up: Energy stocks gave one of the biggest lifts to the Footsie, after fighting in Iraq and Yemen pushed up oil prices, with Brent crude topping $67 a barrel

Greek shares, however, dropped 2.5 per cent spooked by reports that the debt-laden country's prime minister Alexis Tsipras warned creditors on May 12 that Greece has no money to pay the International Monetary Fund before having to tap emergency reserve funds.

Craig Erlam, market analyst at Oanda said: 'While the repayment was actually made last week using emerging cash reserves, Tsipras stressed that Athens would not 'back down on pension and labour issues' as creditors continue to negotiate over a cash-for-reforms deal.'

He added: 'If neither side changes its stance then it would appear Greece is only a couple of weeks from defaulting on its debt and yet, the markets seem rather unfazed.

'Maybe investors have become immune to all this tough talk and still think Tsipras will cave or resign, enabling a late deal to be done. If we remain in this position as we near the 5 June, I doubt investors will be so confident.'

In London, a rise in energy stocks gave one of the biggest lifts to the Footsie, after fighting in Iraq and Yemen pushed up oil prices, with Brent crude topping $67 a barrel.

Explorer Tullow oil firmed 3.1p at 420.0p, Royal Dutch Shell gained 4.5p at 2,030.5p, though BP was only up 0.2p at 452.6p as Goldman Sachs downgraded its rating for the stock to sell from neutral.

Pumps manufacturer Weir Group – which has big exposure to the oil sector - was also a strong gainer, up 59p to 1,957p after broker Citigroup upgraded its rating on the stock to buy from neutral.

Mexican silver miner Fresnillo was the biggest blue chip riser, up 3 per cent or 25.75p to 777.75p after it gave a reassuring outlook in its annual general meeting statement, saying it remains on track to hit its output guidance in 2015 after a strong start to the year.

Elsewhere in the sector, Rio Tinto was also a gainer, adding 10.5p at 2,941p helped by reports it could raise $1billion from the sale of some aluminium assets.

But the world's biggest miner BHP Billiton was a big casualty, dropping 4 per cent or 568p to 1,465p after its South32 spin-off was valued at the lower end of market expectations on its debut on the Australian Stock Exchange.

Away from commodities, Babcock International, which employs 26,000 people across a range of sectors including defence, energy and transport, rose 9p to 1090p after posting a 43 per cent rise in full-year profits to £313.1 million.

M&S shares were also higher - up 2 per cent or 11.25p to 579.25p - amid forecasts that it will report its first improvement in annual results in four years on Wednesday.

Meanwhile Royal Mail gained 11.9p to 497.3p ahead of full year result due this Thursday, helped by an upgrade in rating from broker Investec Securities to buy from reduce.

But negative comment from Investec blighted Lloyds Banking Group, down 0.8p at 88.2p, as the broker cut its rating to sell from hold.

And bottling group Coca-Cola HBC – a good gainer on Friday following a trading update – shed 1p at 1,390p as Deutsche Bank reduced its stance to hold from buy.

Outside the top flight, shares in online gaming firm Bwin.party jumped 10 per cent - up 10.6p to 110p - as rival 888 Holdings confirmed its interest in a takeover bid. 888 shares fell 3 per cent or 5.2p to 164.5p.

Engineering software group Aveva was the top FTSE 250 riser, jumping 12 per cent or 230p to 2,065p after weekend press reports that it could be an acquisition target for Schneider Electric General Electric and Emerson Electric.

But satellites operator Inmarsat fell 3 per cent, down 29.5p to 966.0p after news of a delay in the launch of its third Global Xpress satellite. 

08.15: The Footsie moved higher in early trading, recovery after falls on Friday helped by strength in energy stocks as oil prices rose, although the underlying mood remained cautious after further weak data from China and amid Greek debt default worries.

In opening deals, the FTSE 100 index was 11.2 points, or 0.2 per cent higher at 6,971.70, recouping a 12.55 points decline from the previous session following choppy trading last week.

On commodity markets, the price of Brent crude rose back above $67 a barrel amid supply concerns in the Middle East following fighting in Iraq and Yemen, although Iranian comments that OPEC was unlikely to cut output as well as signs of a strengthening in US production capped overall gains.

Debt saga: Greek prime minister Alexis Tsipras warned creditors on May 12 that Greece has no money to pay the International Monetary Fund before tapping emergency reserve funds

European markets were mixed, with the Dax 30 index in Frankfurt down 0.1 per cent, while France's CAC 40 index gained 0.1 per cent, as the main focus remained on the Greek debt saga.

The debt-laden country's prime minister Alexis Tsipras warned creditors on May 12 that Greece has no money to pay the International Monetary Fund before tapping emergency reserve funds.

US stocks managed a modest rally on Friday despite more weak US data but Asian shares were mixed today following data showing further declines in Chinese house prices.

Prices for new homes in China fell by an average of 6.1 per cent in April from a year earlier, with the weak property market seen as one of the major risks for the world's second biggest economy, which looks set for its worst year in 25 years this year

Jonathan Sudaria, night dealer at Capital Spreads said: 'Following a lacklustre session in the US on Friday and a mixed session in Asia overnight, there's nothing really for traders to get their teeth into.

'Friday's soft US economic data and a drop in Chinese house prices this morning should be a cause for concern.

'However, whenever we've gotten a run of bad data, bulls usually delight at the prospect of continuing/further dovish monetary policy and this morning's start looks as though we'll get that same train of thought on the open, ' he added.

Meanwhile the price of homes for sale in England and Wales fell in the run-up to the May 7 UK election and are likely to start picking up again now that the political uncertainty has lifted, property website Rightmove reported overnight.

Asking prices for homes slipped by a monthly 0.1 per cent, according to the property website's latest survey, conducted between April 12 and May 9. That was the first May fall since just before the previous general election in May 2010.

No other important UK, European, or US economic data is due for release today, so traders will be looking again to the latest UK inflation data, due on Wednesday together with minutes from this month's Bank of England Monetary Policy Committee meeting and – that evening – minutes from the last US Federal Reserve meeting as well.

Stocks to watch include:

BHP BILLITON - The global miner's spin-off South32 debuted in Sydney today near the bottom of expectations as investors awarded only a small premium to the new listing amid concerns about broad weakness in the resources sector.

RIO TINTO – The miner said it plans to sell some of its aluminium assets in a potential $1billion deal, the Financial Times reported, reviving a disposal plan for its Pacific Aluminium unit two years after it was cancelled.

FRESNILLO - The precious metals producer said it remains on track to hit its output guidance in 2015 after a strong start to the year following a 'challenging' 2014.

ROYAL BANK OF SCOTLAND - A US judge on Friday ordered the UK bank and Japan's Nomura to pay a collective $806million for making false statements in selling mortgage-backed securities to Fannie Mae and Freddie Mac.

BWIN.PARTY/888 HOLDINGS – Online gaming company 888 said it had submitted a proposal to buy rival Bwin.Party Digital Entertainment in cash and shares, as it saw 'significant industrial logic' in the combination.

INMARSAT – The satellite operator has delayed the launch of its Global Xpress satellite following the launch failure of another rocket at the weekend, forcing it to also trim its financial outlook.

THORNTONS – The chocolatier said its chief executive Jonathan Hart would be stepping down on June 27.

BABCOCK - The engineering contractor posted a 47 per cent rise in pre-tax profit for the year ended March 31 to £313.1million, up from £218.8milliojn a year earlier, with revenue up 3 per cent to £4.5billion. 

MITIE – The outsourcer has posted flat full operating profit, with its performance held back by local government cuts weighing on demand for its homecare and social housing business.