16th Apr 2015 09:45
LONDON (Alliance News) - London share prices are mixed Thursday mid-morning, in a quiet day in terms of economic data but with plenty of corporate news and broker rating changes to move stocks.
The FTSE 100 is flat at 7,096.34 Thursday, having hit a new record intraday high of 7,111.72 on Wednesday, while the FTSE 250 is down 0.4% at 17,796.56, also having hit a new record intraday high of 17,904.33 on Wednesday.
The AIM All-Share index is outperforming Thursday, up 0.2% at 748.31.
European stocks are trading down, with the CAC 40 in Paris down 0.3% and the Dax 30 in Frankfurt down 0.7%.
BAE Systems, down 3.4% at 514.5 pence, is the worst performer in the FTSE 100, after being downgraded to Neutral from Buy by UBS, with its price target at 540p. The aerospace and defence group shares also have gone ex-dividend. UBS also downgraded Meggit, down 2.8% at 548p and also amongst the biggest fallers, to Sell from Neutral but raised its price target to 520p from 500p.
Reckitt Benckiser Group shares are down 1.6%. Liberum removed the Dettol and Nurofen maker from its Conviction Buy List, and its shares also have gone ex-dividend.
J Sainsbury is also amongst the biggest losers in the blue-chip index, down 2.1% at 278.60p, after ending as the best performer Wednesday. Nomura has cut the supermarket chain's share price target to 175p from 200p, keeping its rating at Neutral.
Separately, Sainsbury's said it is planning to convert the equivalent of around 40 supermarkets of shop space into non-food, The Daily Telegraph reported.
J Sainbury's Chief Financial Officer John Rogers said at an event at a south London store on Wednesday that the company has identified 1.5 million square feet of space across the UK, representing around 6% of its portfolio, that it no longer needs for food.
Diageo is one of the biggest fallers in the blue-chip index, down 2%. The drinks giant said net sales grew in the nine months to March 31, but organic sales and volume declined following difficulties in the Asia Pacific region. It said net sales grew 4.6% in the nine month period but declined 0.3% on an organic basis and were down 0.7% in its third quarter. Volume was down 1.7% in the nine month period and dropped 0.8% in the third quarter. The company cautioned that lower inflation and weak economies will lead to "subdued net sales growth" in the current year.
Unilever, up 4.0%, is the best performer in the FTSE 100. The maker of consumer products including Lipton tea and Vaseline beauty products reported an increase in sales for the first quarter of 2015, helped by movements in currency and underlying sales growth, and said it is making a good start to the year. Revenue increased for its first quarter by 12% to EUR12.8 billion, which it said was helped by "favourable currency movements" and an improvement in underlying sales. Unilever will pay a quarterly dividend of EUR0.302, up 6% on the year before.
Meanwhile, Debenhams, up 5.4% is leading FTSE 250 gainers. The department store operator reported a rise in profit for the first half of its financial year as sales grew following a revamp of its promotional strategy and service improvements. Debenhams said pretax profit grew to GBP88.9 million in the 26 weeks to February 28, up 4.3% from GBP85.2 million a year earlier, as revenue grew to GBP1.33 billion from GBP1.30 billion. Like-for-like sales were up 1.3%, it said. The company said it will maintain its interim dividend of 1 pence per share.
Telecom Plus, down 19%, and Petra Diamonds, down 11%, are the two worst performers in the mid-cap index after issuing profit warnings.
Telecom Plus said its profit in the recently-ended financial year will come in below its expectations due to energy price cuts it made in the fourth quarter and as warm weather cut energy usage by its customers. It said it now expects it pretax profit excluding share incentive scheme charges and amortisation on its energy supply arrangements with nPower to be between GBP52 million and GBP53 million for the year to end-March. It said the figure also takes into account about GBP6 million of higher-than-expected leakage and theft in the gas system.
Still, it re-iterated that it intends to pay a final dividend for the year of 21 pence, bringing the total for the year to 40p, up 14% on the previous year.
Meanwhile, Petra Diamonds said its results for the current financial year are expected to be below the range of current market estimates due to poorer diamond grades it is finding at one of its mines, although it reiterated it is trying to tackle the issue and expects grades at that mine to improve in coming quarters.
Gold miners are trading higher, with Fresnillo up 2.9% and Rangold Resources up 2%. Gold prices rose Wednesday as the dollar weakened against other currencies following some soft economic data from the US. Industrial production dropped more than expected in March, partly reflecting a sharp pullback in utilities output, while manufacturing activity in New York unexpectedly contracted in April, due partly to continued decline in new orders.
Gold is up at USD1,205.35 mid-morning Thursday, while the pound is flat against the dollar, trading at USD1.4834, while the euro is down at USD1.0643.
Investors will focus on the US jobless claims data, due to be released at 1330 BST, in a quiet day in terms on European economic data.
The market will also look to the meeting between Greek finance minister Yanis Varoufakis with US President Barack Obama, due to take place after the European stock markets close.
"Unfortunately for Mr Varoufakis, sympathy is probably the only thing he will receive in the wake of yesterday?s S&P downgrade of Greece to CCC+ with a negative outlook, and last week?s meeting between Greek Prime Minister Tsipras and Russian President Vladimir Putin," writes Michael Hewson, chief markets analyst at CMC Markets UK.
US futures point to a flat opening, with the DJIA, the S&P 500 and the Nasdaq 100 flat.
By Daniel Ruiz; [email protected]
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