13th Apr 2016 07:35
LONDON (Alliance News) - London stock prices moved higher in early trade Wednesday, spurred by a surge in Chinese exports, while Tesco was the biggest of a handful of fallers in the FTSE 100, despite swinging back into profit, as its revenue was hit by the tough environment in the UK grocery market.
The UK's biggest retailer said it made a pretax profit in the year ended February 27 of GBP162.0 million, having suffered a GBP6.33 billion pretax loss the year before, when it booked a staggering GBP7.0 billion of impairments, writedowns and restructuring charges. These did not repeat in financial 2016.
However, revenue slipped to GBP54.43 billion from GBP56.93 billion, as the supermarket chain continued to struggle in a deflationary UK food market, with competition from German discounters Aldi and Lidl.
The stock was down 2.8%, dragging down peers J Sainsbury, down 0.6%, and Wm Morrison Supermarkets, down 0.6%.
The FTSE 100 index was up 1.1%, or 70.68 points, at 6,313.07. The FTSE 250 was up 0.8% at 16,923.51 and the AIM All-Share was up 0.3% at 727.92.
In Europe, the French CAC 40 index was up 1.4%, as was the German DAX 30.
Earlier, equities in Asia had rallied after Chinese export data topped expectations. The Shanghai Composite closed up 2.3%, and the Hang Seng in Hong Kong is up 2.6%. The Japanese Nikkei 225 index ended up 2.8%.
Exports in China grew 11.5% year-over-year in March in dollar terms, data from the General Administration of Customs showed, exceeding economists' expectations for a 10.0% rise. It was also much improved from the 25.4% decline seen in February.
At the same time, imports plunged 13.8% in dollar terms in March from a year ago, faster than the 10.1% decrease expected by economists. The visible trade surplus of the country came in at USD29.86 billion in March, which was lower than the expected surplus of USD34.95 billion.
In yuan denominated terms, exports surged up 18.7%, while fell in imports was much less pronounced, 1.7% in March.
The positive Chinese data helped London's mining sector. Anglo American was the best performer in the FTSE 100, up 5.3%, followed by Rio Tinto, up 4.3% and Antofagsta, up 4.1%.
Elsewhere on the London Stock Exchange, Premier Foods' share price plummeted 29% to 40.19 pence after US spices and flavourings company McCormick & Co said it has decided not to make an offer for the UK food company after deciding it would not be able to make a bid which would secure approval from the Premier Foods board.
McCormick had tabled a 65.00p per share offer for Premier Foods at the end of March after Premier Foods had rejected two other offers. Premier then faced pressure from shareholders to enter into talks with McCormick and relented after the higher offer had been made.
Premier said last week the talks with McCormick had been "constructive", but on Wednesday McCormick said it would not be making an offer for Premier.
Halfords Group led the FTSE 250 gainers, up 7.7%. The car parts and bicycles retailer said its performance improved in the fourth quarter, leaving total revenue higher and demonstrating an improvement in the performance of its cycling business.
Halfords said total revenue for the 11 weeks to April 1 rose 3.2%, leaving total revenue up 1.7% for the 52 weeks to the same date.
Like-for-like revenue grew 2.6% in the fourth quarter and by 1.5% for the full year, it said. Trading on a like-for-like basis improved for the retail portion of its business in the fourth quarter, with like-for-like sales up 3.1% and full-year like-for-like sales up 1.3%.
Dunelm Group said Deputy Chairman Will Adderley sold more shares in the company than originally planned, but it reiterated that he is "fully committed" to his role at the retailer.
Dunelm said Adderley sold 8.0 million shares at a price of 915.0 pence each, implying a total value of around GBP73.2 million for the 4.0% stake. Dunelm traded down 3.2% to 923.50p, making it the worst performer in the FTSE 250.
On Tuesday, Dunelm advised that Adderley was set to only sell 6.0 million shares, or a 3.0% stake in the company.
The shares sold were held by WA Capital Ltd, a company controlled by Adderley, who told the company he was selling the shares to allow for "greater portfolio diversification".
Banknote printer De La Rue was the biggest gainer in the FTSE All-Share, up 13%, after it said it expects to report full-year underlying operating profit ahead of previous expectations, driven mainly by "strong operational outperformance" on contracts within its currency business.
In a statement, De La Rue said it expects to report an underlying operating profit of about GBP62 million in the year ended March 26, which is lower than the GBP69.5 million reported in the corresponding period to March 28, 2015.
Full-year revenue has been "broadly in line" with expectations, the company said.
In the economic calendar, the Bank of England's credit conditions survey is at 0930 BST, before euro area industrial production at 1000 BST. Later in the day, US MBA mortgage applications are at 1200 BST, retail sales and US producer price index are both at 1330 BST, and the Energy Information Administration's crude oil stocks are at 1530 BST.
By Neil Thakrar; [email protected]; @NeilThakrar1
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