31st Mar 2016 07:36
LONDON (Alliance News) - London shares opened lower Thursday, as investors await a raft of economic data releases from the UK, Europe and the US, with commodities stocks giving back some their gains from Wednesday and TUI Group among the few risers following a positive update.
The FTSE 100 was down 0.7%, or 43.42 points, at 6,159.75. In Europe, the CAC 40 index in Paris and the DAX 30 in Frankfurt were down 0.7% and 0.5%, respectively.
Miners and oil stocks supported a positive close Wednesday by London's blue-chip index. Commodities prices and commodities stocks rose on the back of a weak dollar after US Federal Reserve Janet Yellen seemed to pour cold water over the prospects of an April US interest hike. However, these same stocks were the main culprit for Thursday's negative open.
Anglo American down 4.0% and Glencore down 3.8% among the worst performing miners, while among oil companies BP was down 1.0% and Royal Dutch Shell 'A' shares were down 1.0%.
Old Mutual, down 3.6%, BHP Billiton, down 3.8%, and Wolseley, down 1.4%, were also weighing on the blue-chip index after going ex-dividend.
At the other end of the FTSE 100, TUI was the best performer, up 3.5%. The travel operator said it will deliver growth in underlying earnings before interest, tax and amortisation in its financial year to the end of March, as it makes progress with its summer 2016 programme. TUI said winter 2015/16 is closing as expected, with 95% of the source market programme sold and increased revenue of 3% driven by higher average selling prices across most major source markets.
Summer 2016 trading is also doing well, with both revenue and bookings ahead of last year, TUI said. 47% of the programme is sold so far, with revenue up 3% and bookings up 2%. It said bookings for Turkey were subdued but this was being compensated by bookings elsewhere.
As a result, TUI said it remains well positioned to deliver underlying Ebita growth of at least 10% for the full year to the end of September. TUI will release its results for the first half ending March 31 on May 11.
Cruise operator Carnival was up 1.3%, adding to its gains from Wednesday, when it said its cumulative bookings for 2016 are well ahead year-on-year as net income and revenue grew in the first quarter of its financial year. Carnival had added 4.0% on Wednesday.
Meanwhile, Mediclininc International was up 1.3% as the private healthcare group said it has seen strong patient growth across its operating platforms. For the 11 months to the end of February, Mediclinic said revenue from its African and Swiss businesses both grew, while revenue from its Middle East operations also increased. Al Noor is trading in line with expectations, the company added.
The South African company joined the London market through the reverse takeover of Abu Dhabi-based hospitals operator Al Noor Hospitals and subsequently joined the FTSE 100 index. It also owns a 29.9% stake in UK healthcare company Spire Healthcare Group.
The mid-cap FTSE 250 index was down 0.3% at 16,923.84 and the AIM All-Share was flat at 709.86.
AO World was the best mid-cap performer by far, up 13%. The online domestic appliances retailer said its UK business performed ahead of expectations in the fourth quarter of its financial year, while the European segment also performed well. AO World said UK revenue and earnings before interest, tax, depreciation and amortisation in the fourth quarter ended March 31 grew ahead of expectations, and that it now expects full-year UK revenue to be up by 19% and UK adjusted Ebitda to reach GBP17 million.
Serco Group was another gainer, up 3.0%. The outsourcer said the review of its joint venture contract managing the operations of the Atomic Weapons Establishment on behalf of the UK government has been concluded. Serco said the updated contract provides a framework through to 2025, with regular pricing reviews put in place. The next pricing review will take place in 2019.
Serco did not provide any financial details on the deal, but said the new structure of the contract will impose greater risk-sharing on the customer, the UK Ministry of Defence, with an opportunity to earn higher margins through outperforming against the terms of the deal.
There is a fairly busy economic calendar ahead on Thursday, with UK fourth-quarter gross domestic product data likely to grab market attention at 0930 BST. Consensus expectations are for a quarterly growth figure of 0.5%, unchanged from the third quarter. Year-on-year, a figure of 1.9% for the fourth quarter is expected, also unchanged from the previous reading.
Alongside the GDP data, there are UK mortgage approvals and current account data at 0930 BST. The Eurozone's consumer price index is due at 1000 BST Thursday, while the European Central Bank monetary policy accounts are at 1230 BST. In the US, initial and continuing jobless claims are set for 1330 BST, while the US Chicago Purchasing Manager's Index is due at 1445 BST.
Already released, consumer confidence in the UK was largely unchanged in March, the latest survey from GfK revealed with an index score of 0. That was unchanged from the February reading, and it beat forecasts for a score of -1. The March reading was steady at its lowest reading in more than a year, although it spent much of the previous eight years in the red.
In Tokyo Thursday, the Japanese Nikkei 225 index ended down 0.7%. In China, the Shanghai Composite is up 0.2%, while the Hang Seng index in Hong Kong is down 0.3%.
By Daniel Ruiz; [email protected]
Copyright 2016 Alliance News Limited. All Rights Reserved.
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