12th Apr 2016 07:38
LONDON (Alliance News) - Stocks in London were mostly lower after the open Tuesday but with miners again pushing higher and with March inflation figures for the UK due at 0930 BST.
The FTSE 100 was down 0.1%, or 7.8 points, at 6,192.32. In Europe, the CAC 40 in Paris was down 0.1% and the DAX 30 in Frankfurt was up 0.3%.
Ashtead Group was the worst blue-chip performer, down 2.2%, after HSBC cut the equipment rental company to Hold from Buy. Meanwhile, shares in drugmaker AstraZeneca also were suffering after a downgrade, as Goldman Sachs reduces its recommendation on the stock to Sell from Neutral. The stock was down 1.5%.
Shares in Premier Inn and Coffee Costa owner Whitbread also were down 1.5%. The group said Christopher Rogers, the managing director of the Costa, has stepped down from his post to be replaced by Dominic Paul. Rogers will step down from the board on April 20 but remain with the company until July 1 to ensure a smooth handover. Paul will take up his new role on June 6.
Paul joins Whitbread from cruise company Royal Caribbean International, where he has been senior vice president of international since 2013. Prior to this, he worked at International Consolidated Airlines-owned British Airways and easyJet.
Tesco was another decliner, off 1.3%. The supermarket chain said it has agreed to sell a stake in e-commerce business Lazada Group to China's Alibaba Group Holding for USD129.0 million in cash. Tesco first invested in Lazada in November 2013 and had held a 19.6% stake in the business prior to the sale to Alibaba. Its remaining stake in Lazada will be 8.3%.
Lazada is an e-commerce platform for local and international sellers and brands in South East Asia. Following the deal, Alibaba will be its controlling shareholder. Tesco intends to use the proceeds from the sale for general working capital purposes.
Miners were again leading the gainers in the FTSE 100, adding to their gains on Monday, amid higher oil prices. Anglo American was up 6.3%, Glencore up 3.2% and Rio Tinto up 2.0%. Oil companies were higher as well. Royal Dutch Shell 'A' shares were up 0.7%, and BP was up 0.5%.
Anglo American said rough diamond sales for its De Beers unit rose in the third sales cycle against the second. The miner said the value of rough diamond sales by De Beers in the third sales cycle hit USD660.0 million, up from USD617.0 million in the second sales cycle for 2016. Anglo American said continued stability for polished diamond prices has supported a "reasonably positive environment" for rough diamond sales thus far in 2016.
Brent crude reached on Monday its highest level so far in 2016 at USD43.02 a barrel, following the steep drop earlier in the year that saw the North Sea benchmark touch multi-year lows around USD27. Shortly after the London equities open Tuesday, Brent was at USD42.80 a barrel, flat with USD42.90 at the stock market close on Monday.
Mid-cap miners Vedanta Resources and KAZ Minerals also were in the green, up 2.7% and 2.4%, respectively.
The FTSE 250 was down 0.3% at 16,726.11 and the AIM All-Share was up 0.3% at 723.69.
Molten metal flow engineering company Vesuvius was the worst mid-cap performer, down 3.7%, after being downgraded to Underperform from Hold by Jefferies. Meanwhile, Ted Baker was down 3.2% after Panmure Gordon initiated the retailer with a Sell recommendation.
FTSE 250-listed recruiter Michael Page International was down 1.0%. The company said gross profit grew in the first quarter despite tough conditions in some markets and a flat performance in the UK. Michael Page said overall gross profit for the quarter to the end of March grew 4.9% year-on-year, or 3.6% in constant currencies. Gross profit rose 14% in Europe, the Middle East and Africa in the quarter, the only area to show robust growth.
The main focus in the economic calendar Tuesday is UK inflation, due at 0930 BST.
"Today's UK CPI data for March is forecast to show an uptick in the annual rate of both 'headline' and 'core' inflation. Headline inflation held at 0.3% in February but the rise in the oil price during March should now lead to a modest acceleration," said Lloyds Bank economist Rhys Herbert.
Herbet said the expected rise in the core rate to 1.3% may reflect the first signs of sterling's recent slide feeding through to import prices. The pound has declined by 3.1% against the dollar so far in 2016. After the London open Tuesday, the pound was standing at USD1.4274 compared to USD1.4260 at the close Monday.
"While this core measure is above the headline rate, it is still well below the Bank of England's inflation target [of 2%]. So the modest forecast pickup in inflation is unlikely to have any immediate implications for UK monetary policy," Herbert said.
The year-on-year UK core inflation February reading came in at 1.2%. According to FXstreet.com, March UK headline inflation consensus forecasts are at 0.3% for the month-on-month reading from the previous 0.2%, while estimates are at 0.4% for the year-on-year figure, up from the 0.3% in February.
Alongside the consumer inflation data, there are the UK retail and producer price indices.
Like-for-like sales in the UK were down 0.7% on year in March, the British Retail Consortium said earlier Tuesday. That was well shy of forecasts for an increase of 1.4% following the 0.1% gain in February - and it marked the weakest showing since August. The BRC noted that the presence of Easter in the month may have had an effect on the numbers, as well as a spike in online shopping.
Germany's consumer prices increased as estimated in March, final data from Destatis showed. Consumer prices rose 0.3% year-on-year in March after staying flat in February. The preliminary inflation figures were left unchanged. Month-on-month, the increase in consumer prices doubled to 0.8%, as estimated, from 0.4% a month ago.
The harmonized index of consumer prices edged up 0.1% in March, reversing a 0.2% fall in February. On a monthly basis, the HICP climbed 0.8%. Both readings were in line with consensus expectations.
Also in the economic calendar Tuesday, US import price and export price indices are due at 1330 BST, while the Redbook index is due at 1355 BST. American Petroleum Institute weekly crude oil stock data are due at 2130 BST.
By Daniel Ruiz; [email protected]
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