14th Apr 2015 09:52
LONDON (Alliance News) - London's main stock indices have turned lower mid-morning Tuesday, erasing earlier gains after UK inflation remained at zero for a second straight month in March.
The FTSE 100 is down 0.2% at 7,053.87, the FTSE 250 is down 0.1% at 17,822.09, and the AIM All-Share index is down 0.2% at 738.27.
UK inflation remained at zero in March after easing to that level for the first time on record in February, according to data from the Office for National Statistics
"This would usually boost the equity market, but there is a sense of disappointment that the UK is teetering on the edge of deflation," said IG analyst David Madden.
Month-on-month, the consumer price index gained 0.2%, in line with economists' forecast, but slower than a 0.3% rise in February. At the same time, core inflation that excludes energy, food, alcoholic beverages and tobacco, eased to 1.0% in March from 1.2% in February.
The pound fell slightly against the dollar following the release of the data and trades at USD1.4632.
House price inflation in the UK eased for a fifth consecutive month in February, data from the ONS also showed. Average house prices rose 7.2% annually following 8.4% growth in January.
UK retail sales grew more than expected in March, as food sales posted their strongest expansion since July 2013 due to the timing of Easter, survey data published by the British Retail Consortium and KPMG showed Tuesday. Retail sales advanced 3.2% on a like-for-like basis in March from last year, when it decreased 1.7%. Sales were expected to rise by a more modest 0.5%.
Europe's main equity indices are down, with the CAC 40 in Paris down 0.5%, having reached a new closing high on Monday at 5,254.12, while the DAX 30 in Frankfurt is down 0.7%.
Germany's wholesale prices continued to fall in March but the pace of decline slowed for the second straight month, data from Destatis showed early Tuesday. Wholesale prices fell 1.1% year-on-year in March, following a 2.1% drop in February. The wholesale price index has been declining since July 2013.
The annual decline was largely driven by a 11.9% fall in prices of solid fuels and related products. Month-on-month, wholesale prices rose 1% in March, faster than February's 0.5% increase. This was the second consecutive rise in prices and the strongest since September 2012, Destatis said.
"With a lack of any significant economic data yesterday, the markets were fairly quiet. However it may have just been the calm before the storm as there is a significant amount of tier one economic data in the coming days with which markets could react off," said Hantec Markets analyst Richard Perry. The list includes China GDP numbers due on Wednesday, US Jobless claims on Thursday and UK employment figures on Friday.
US futures point to a lower open on Wall Street, with the DJIA, the S&P 500 and the Nasdaq 100 currently pointed down 0.1%. Quarterly results from JP Morgan, Wells Fargo, Intel and Johnson & Johnson are likely to take centre stage as the new US earnings season gets underway in earnest.
But the currency markets will also focus on US retail sales, due to be released at 1330 BST.
"The data has disappointed for the past three months but March’s number should be clean of weather related issues that could mitigate the weaker data. This will have an impact across the dollar pairs," Perry says.
The US producer price index is due to be released at 1330 BST Tuesday.
Miners are amongst the best performers in London's main indices after being amongst the worst performers on Monday. The FTSE 350 Mining Sector Index is up 0.7%, and amongst its constituents, BHP Billiton is up 1.1%, Rio Tinto up 0.7%, Anglo American up 0.5%, Glencore up 0.7%, Acacia Mining up 0.9% and Kaz Minerals up 1.7%.
British Land Co is one of the best performers in the blue-chip index, up 0.4%. The property developer extended its portfolio at the Paddington Central development in West London by acquiring the One Sheldon Square office development for GBP210 million.
Panmure Gordon analyst Sue Munden says that, following the acquisition, British Land will benefit significantly from the opening of Crossrail in 2017, which will connect Paddington with the City and Canary Wharf. "The lease review is in 2017, just as Crossrail opens and rents should reflect the convenience of the location."
Aberdeen Asset Management is one of the biggest fallers in the FTSE 100, down 2.2%. Fears that hundreds of international fund managers could face unexpected tax bills in India have been heightened after Aberdeen, one of the largest investors in the country, became the first foreign institution to confirm it had received a demand for payment, the Financial Times reported Tuesday.
“Our advice is that tax treaties apply, so we aren’t liable. Mind you, that was what Vodafone thought, and look what happened to them,” the paper quotes Hugh Young, Aberdeen’s managing director in Asia as saying.
In the FTSE 250, Poundland Group is one of the biggest gainers, up 1.5%, after the retailer reported an increase in revenue for the fourth quarter of its financial year and said results for its full year are in line with market expectations. It said total revenue, excluding operations in Spain, increased by 6.5% in the 13 weeks to March 29 to GBP255 million, from GBP239.5 million in the same period a year earlier.
However, it said that the contribution from new store trading weeks in the fourth quarter has been lower than last year due to the timing of store openings.
By Daniel Ruiz; [email protected]
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