2nd Dec 2016 08:39
LONDON (Alliance News) - Stock prices in London opened lower on Friday, with oil producers giving back some of the strong gains made on Thursday, after crude prices encountered some resistance to the rally that followed the OPEC output deal on Wednesday.
Laird was the biggest mid-cap decliner, after the wireless components maker outlined plans for a rights issue of new shares in the first quarter of 2017 and said it will skip its final dividend for 2016.
Berkeley Group was the biggest among a handful of gainers in the mid-cap FTSE 250 index, also supporting gains in other housebuilders. Berkeley said reservation levels remain 20% down on the same period the prior year, though it said both revenue and profit grew in the first half of its financial year.
The FTSE 100 index was down 0.9%, or 59.21 points at 6,693.72. The FTSE 250 was down 0.7% at 17,372.31, and the AIM All-Share was down 0.4% at 809.86.
The BATS UK 100 was down 0.8% at 11,313.15, and the BATS 250 down 0.5% at 15,809.23. The BATS Small Companies was flat at 10,135.80 points.
In mainland Europe, the French CAC 40 index was down 0.9% and the German DAX 30 down 0.8%.
"A negative European open comes after a negative lead from the US was the foundation for a disappointing session in Asia overnight," said analysts at Accendo Markets.
In Asia on Friday, the Japanese Nikkei 225 index closed down 0.5%. In China, the Shanghai Composite ended down 0.9%, while the Hang Seng index in Hong Kong fell 1.4%.
Wall Street ended mixed on Thursday, with the Dow Industrials up 0.4%, but the S&P 500 index down 0.4% and the Nasdaq Composite 1.4% lower.
The morning highlight in the economic calendar is a UK construction purchasing managers index reading at 0930 GMT, while the afternoon focus will be US nonfarm payrolls at 1330 GMT.
UK construction PMI is expected to come in at 52.5 in November, flat with the score of 52.6 seen in October. Readings above the 50.0 line indicate expansion in the sector.
US nonfarm payrolls, unemployment and average earnings data for November are taking on particular significance ahead of the Federal Reserve monetary policy meeting on December 13 and 14. According to FXStreet.com, US nonfarm payrolls are expected to come in at 175,000 in November, higher than the 161,000 seen in October.
Also in the economic calendar, the eurozone producer price index is at 1000 GMT. In the US, the Baker Hughes US oil rig count is at 1800 GMT.
Brent crude was quoted at USD53.42 a barrel on Friday after the equities open, slightly lower than the USD54.09 a barrel at the London close on Thursday. Crude prices were taking a breather following a strong rise since the OPEC production agreement.
The North Sea benchmark touched a high of USD54.50 a barrel on Thursday, after the cartel on Wednesday confirmed it will reduce oil supply by 1.2 million barrels a day to 32.5 million barrels day effective from January 2017.
Investors are now focusing on a meeting between Russia and other non-OPEC producers on December 9 to discuss whether countries outside the cartel will join it in cutting supply.
OPEC expects these countries to reduce their output by another 600,000 barres per day, including a commitment from Russia to slash 300,000 barrels from its own daily production, while Azerbaijan and Kazakhstan have said they might also cut output.
Royal Dutch Shell 'A' shares were down 1.3%, while BP was down 0.9%. On Thursday, Shell 'A' ended up 1.7%, while BP rose 2.3%.
Miners were also dragging the FTSE 100, with BHP Billiton down 2.8% and Anglo American down 2.0%.
In the FTSE 250, Laird, down 16%, said trading remained in line with its expectations, but it will pay no final dividend for 2016. It will raise up to GBP185.0 million in the rights issue, due to take place in the first quarter of 2017 and to be underwritten by JPMorgan Cazenove.
Laird shares are set to be demoted from the FTSE 250 index later this month as a result of the FTSE index review published earlier this week.
Berkeley, which almost exclusively focuses on more-expensive developments in London and the South East of England, said higher property transaction costs and uncertainty relating to the Brexit vote have impacted transaction levels throughout 2016. The stock was up 3.5%.
Berkeley said, excluding a "hiatus" around the EU referendum in the UK, reservations for the period remain 20% below the prior year, but noted that the market has "begun to adjust to the increased stamp duty and general market uncertainty".
The housebuilder said pricing remains resilient, and in overall terms, its prices have moved in line with the market. At higher price points, Berkeley said it has absorbed the impact of the rise in stamp duty charges, though said this was "more than offset by increases elsewhere".
Property stock investors welcomed the interims, with peers Barratt Developments up 1.4%, British Land up 0.9%, Land Securities up 0.6 and Taylor Wimpey up 0.5%.
Also in the FTSE 250, IP Group was up 3.8%, after saying its portfolio company Genomics and Oxford University's Wellcome Trust Centre for Human Genetics have become the first to sequence and analyse multiple human genomes using hand-held technology from IP Group's other portfolio company Oxford Nanopore Technologies.
By Daniel Ruiz; [email protected]
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