19th Jul 2016 07:31
LONDON (Alliance News) - London-listed stocks opened lower Tuesday, weighed down by the mining sector even as Rio Tinto said its iron ore production rose in the second quarter.
The world's second-largest iron-ore producer, said its Pilbara iron ore production for the second quarter increased 8% to 80.9 million tons. Pilbara iron ore shipments rose 6% to 82.2 million tons.
Rio Tinto chief executive Jean-Sebastien Jacques said: "Rio Tinto has delivered another robust quarter of operational performance. We continue to focus on value and maximising cash flow from our assets, through both commercial and operational excellence while maintaining capital discipline."
Bauxite production was 9% higher than the first half of 2015. This enabled a 5% increase in third-party sales over the first half of 2015. First half aluminium production was 10% higher than the same period in 2015, with the modernised and expanded Kitimat smelter delivering its first full quarter at nameplate capacity.
Rio Tinto was the worst performer in the FTSE 100, down 2.1%, while peers Anglo American and BHP Billiton were down 1.7% and 1.6% respectively.
The FTSE 100 index was down 0.2%, or 10.94 points, at 6,684.48. The FTSE 250 was down 0.1% at 16,847.30, but the AIM All-Share was up 0.2% at 728.07.
In mainland Europe, the CAC 40 index in Paris was down 0.5% and the DAX 30 in Frankfurt was down 0.3%.
In Asia, the Nikkei 225 index in Tokyo closed up 1.4% and the Shanghai Composite ended down 0.2%. The Hang Seng in Hong Kong continues down 0.5%.
Evraz was the worst performer in the FTSE 250, down 2.8%, after it said all of its units reported a drop in production during the first half of 2016 as the Russian company produced less steel, steel products and coking coal concentrate.
Crude steel production in the first half of this year was down 7.6% to 6.7 million tonnes from 7.3 million a year earlier, whilst production of steel products, net of re-rolled volumes, fell 8.0% to 6.2 million tonnes from 6.7 million.
Evraz said production was down due to a planned maintenance shutdown at one of the furnaces in Russia, hitting both steel and steel product production.
SSP Group said its third-quarter performance was in line with expectations, as revenue benefited from the recent weakness in sterling.
SSP, which operates food and beverage outlets in travel locations, said total revenue in the three months ended June 30 grew by 9.0% year-on-year, boosted by the weakening of sterling against major European currencies.
On a constant currency basis, total revenue rose by 4.8% while like-for-like sales rose by 3.0%.
SSP said sales in the UK were robust, continuing to benefit from passenger growth in the air sector. Continental Europe remained mixed, with a good performance from Spain but weaker trading in France and Belgium resulting from the recent terrorist attacks in Paris and Brussels. The stock traded up 1.3%.
Dairy Crest Group, up 0.9%, said trading in the first quarter of its financial year was in line with its expectations.
The dairy products maker said combined sales volumes of the four key brands of Cathedral City, Clover, Country Life and Frylight in the three months ended June 30 were in line with the first quarter of the prior year. Its outlook for the full year therefore remains unchanged.
"The year has started off as we expected. Our branded business continues to perform well. In cheese, we have successfully re-launched Cathedral City, the nation's favourite cheese, with new packaging and branding. This has been supported with a wide-reaching media and promotional campaign," Chief Executive Mark Allen said in a statement.
The main focus in the economic calendar for London is UK inflation data at 0930 BST. According to FXStreet, the consumer price index is expected to rise by 0.4% year-on-year in June, accelerating slightly from the 0.3% rise in May.
The core consumer price index, which excludes seasonally volatile products such as food and energy, is expected to show an annual expansion of 1.3%, versus 1.2% in May.
The UK inflation data is followed by ZEW economic sentiment surveys for Germany and the eurozone, both at 1000 BST. US housing starts and building permits are at 1330 BST, before the Redbook index on US general retail sales at 1355 BST.
At 1505 BST, Ben Broadbent will be the latest member of the Bank of England's monetary policy committee to make a speech after the UK central bank's surprise decision to keep its interest rate unchanged last week.
By Neil Thakrar; [email protected]; @NeilThakrar1
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