15th Sep 2015 07:36
LONDON (Alliance News) - UK stocks opened mostly flat Tuesday, with shares in DIY retailer Kingfisher amongst the worst performers in the FTSE 100 after it said its pretax profit fell in the first half of its financial year.
Kingfisher was down 2.1% at the open, after it reported lower pretax profit in the 26 weeks ended August 1, which it said was hit by movements in currency rates, but said that the business is on track in its turnaround programme. The DIY retailer, which owns brands including B&Q and Screwfix, reported a 1.8% decline in pretax profit to GBP386 million from GBP393 million in the same period the year before, as sales fell 4.8% to GBP5.49 billion from GBP5.77 billion.
Kingfisher said that sales and profit were hit by adverse foreign exchange movements on the translation of non-sterling profits, but that it is progressing with its plan to turn the business around. The company will pay an interim dividend of 3.18 pence, up 1% on the 3.15p it paid the prior year.
Miners also were pushing lower, with Glencore down 1.6%, BHP Billiton, down 1.4%, Rio Tinto, down 1.4%, Antofagasta, down 1.0%.
Legal & General Group was down 1.0% after UBS started the insurance and investment management company with a Sell recommendation.
Meanwhile, shares in information services and credit reports company Experian were leading the blue-chip index, up 1.4%, benefiting from an upgrade by HSBC to Buy from Hold.
In the FTSE 250, Ocado Group was the biggest gainer, up 3.8%, after it reported growth in sales in the third quarter of its financial year as its average orders per week increased, and it said that it expects to continue growing slightly ahead of the UK online grocery market.
The purely online grocery business said that its group sales in the 12 weeks ended August 9 grew 17% to GBP272.0 million from GBP231.9 million in the same period the year before, as retail sales rose 15% to GBP252.0 million from GBP218.5 million.
In the red, Close Brothers Group was down 1.0% after being downgraded to Equal Weight from Overweight by Barclays.
The FTSE 100 was flat at 6,086.81, the FTSE 250 also was flat at 16,933.32 and the AIM All-Share was up 0.2% at 733.48.
Investors are focusing on a busy economic calendar ahead including UK consumer price and producer price indices due at 0930 BST.
Oanda analyst Craig Erlam says the economic data being released Tuesday could bring some volatility to the markets, especially UK inflation data, given the Bank of England?s "apparent" desire to raise interest rates in the foreseeable future.
"Inflationary pressures are lacking in the UK, as they are throughout the world at the moment, and yet policy makers at the BoE are determined to begin the cycle of raising rates," says Erlam. "The worry is that inflation could rise rapidly if they keep rates low for too long, despite the CPI reading currently only being at 0.1% and expected to fall to 0% in August."
In Europe, the CAC 40 in Paris was up 0.4% and the DAX 30 in Frankfurt was up 0.5%.
German ZEW surveys of economic sentiment are due at 1000 BST, while the Eurozone trade balance also is due at 1000 BST.
In the US, retail sales data are expected at 1330 BST, while the NY Empire State manufacturing index also is due at 1330 BST. US Industrial production is due at 1415 BST, and US business inventories are expected at 1500 BST.
Lloyds Bank said that, in advance of Thursday?s US Federal Reserve monetary policy decision, Tuesday's set of US data seems "unlikely to meaningfully change" the view of most Federal Open Market Committee members.
Analysts are still unable to settle on a common view as to whether the Fed will raise US interest rates this week or later in the year. Nomura expects the US central bank to hold fire and wait for a December "lift-off", while Societe Generale analyst Kit Juckes expects the Fed to raise rates on Thursday.
SocGen's Juckes believes that the US economy is strong enough to withstand the start of policy normalisation and the risks of waiting outweigh the risk of a negative shock if the FOMC members do act.
Wall Street ended lower Monday. The DJIA and the S&P 500 both finished down 0.4% and the Nasdaq Composite closed down 0.3%.
In Asia on Tuesday, the Japanese Nikkei 225 closed up 0.3%.
The Bank of Japan kept its massive stimulus unchanged on Tuesday as expected by economists. In a statement, the BoJ announced that the policy board headed by Governor Haruhiko Kuroda decided by an 8-1 majority vote to maintain its target of raising the monetary base at an annual pace of about JPY80 trillion.
The Japanese central bank will conduct purchases in a flexible manner in accordance with financial market conditions. The BoJ also revealed that private consumption has been resilient and housing investment has been picking up against the background of steady improvement in the employment and income situation.
Meanwhile, weakness is back in Chinese equities. The Shanghai Composite closed off 3.5%, while the Hang Seng index in Hong Kong is down 0.2%.
By Daniel Ruiz; [email protected]
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