Friday June 26th

26-06-2015

U.S. stock index futures indicated a flat to positive open for Wall Street on Friday, with focus on events abroad following a slide in Chinese stocks and deadlock in talks to avert a debt default in Greece. European stocks tradedbroadly lower after talks on Thursday on a cash-for-reforms deal between Greece and its international creditors failed to reach a successful conclusion, with further talks set to take place on Saturday. Greece is at risk of defaulting on a 1.6 billion euro ($1.8 billion)-debt repayment to the International Monetary Fund on June 30, with Greece's bailout program also set to expire at the end of the month. "I expect to see significant risk aversion... with investors preparing for fireworks over the weekend," said Craig Erlam, senior market analyst at OANDA, in a note. "The rhetoric coming from both camps over the last couple of days doesn't make for nice reading and many people will be preparing for the worst-case scenario if both sides refuse to back down on key issues, most notably pensions, and accept the consequences," he said. U.S. stock futures edged higher over the course of early trade in Europe, with Dow Jones industrial average futures up almost 30 points. China could be in the spotlight on Wall Street on Friday after the benchmark Shanghai Composite stock index closed down 7.4 percent, in its biggest one-day percentage fall in five months. New listings have dented the stock market, while gains of over 100 percent over the past year have triggered a debate over whether a bubble in Chinese shares is now bursting. In the United States, investors will watch the final reading of the Michigan sentiment index, due out at 10:00 a.m. ET. "The trend of economic data from the U.S. has turned distinctly positive recently, so Friday's University of Michigan consumer sentiment report may give the dollar a jolt higher if it can also come in above expectations," Jasper Lawler, a market analyst at CMC Markets, said in a note. China's Shanghai Composite index crashed more than 7 percent on Friday amid increasing worries that the country's bull run is running out of steam. Risk-off sentiment from the mainland also cast a shadow on regional bourses, which mostly ended in negative territory. Nikkei sheds 0.3%. Japan's Nikkei 225 index nursed modest losses even though data released before the market open came in better than expectations. Oil prices slipped Friday, remaining stuck in tight trading ranges as investors awaited the outcome of Iranian nuclear talks which could lead to a big increase in Iranian crude exports. The market also monitored last-minute negotiations to try to avert a Greek debt default and avoid Greece's exit from the euro. Brent crude for August was down 32 cents at $62.88 a barrel by 8:39 a.m. EDT (1239 GMT) after ending the previous session 29 cents lower. U.S. crude fell 44 cents to $59.26 a barrel after finishing Thursday down 57 cents. Gold edged off two-week lows on Friday on caution ahead of crunch talks on Greece this weekend, although concerns over the longer-term outlook for the metal in an environment of rising interest rates capped gains. Spot gold hovered around $1,173.00 an ounce, while U.S. gold futures for August delivery were up 50 cents an ounce at $1,172.30. Spot gold earlier fell to $1,169.98, its lowest since June 8.