16th Jan 2014 17:39
LONDON (Alliance News) - The FTSE 100 snapped a four-day winning streak Thursday as major global indices turned slightly lower, despite a strong performance from the London mining sector and some individual retailers.
The FTSE 100 closed down 0.1% at 6,815.42, the FTSE 250 closed down 0.5% at 16,209.65, while small caps outperformed, with the AIM All-Share index ending up 0.1% at 884.11.
The FTSE 350 mining sector index put in a strong performance, closing up 3.2%, with BHP Billiton leasing the way. Rival Rio Tinto, which closed up 2.5%, also ended among the top gainers on the blue-chip index.
Rio Tinto reported that it had increased production for iron-ore and other metals, achieved record shipment numbers and slashed its annual costs in the fourth quarter of 2013.
"An upbeat broker note from Citigroup also helped boost the sector as analysts there suggested the recent weakness could well be about to turn around," said Michael Hewson, chief market analyst at CMC Markets.
BHP Billiton closed up 3.8% after Citigroup raised its recommendation on the stock to Buy, from Neutral.
Elsewhere, blue-chips Fresnillo closed up 5.2, Glencore Xstrata closed up 3.5%, and Randgold Resources closed up 2.7%, while mid-caps Polymetal International closed up 5.7% and African Barrick Gold closed up 2.2%.
The retail sector saw a flurry of further Christmas trading updates Thursday, most of which were largely positive. However, retailer shares put in a mixed performance.
Primark sales continued to grow at a double-digit rate in recent weeks, but that wasn't enough to stop FTSE 100-listed owner Associated British Foods closing down 2.6% as it warned that its sugar business was performing even worse that it had expected. ABF now expects an even bigger fall in profits for the year from the division.
In the FTSE 250, Halfords, closing up 7.2%, was the biggest overall gainer. The car products and bike retailer said total revenues for the 15 weeks to January 10 increased 6.6%, with like-for-like revenues up 5.2%, as it saw record growth of 13.8% in online retail sales. Revenue was up 7.3% for the 41-week period to January 10, while like-for-like revenue growth was 5.9%.
Argos and Homebase owner Home Retail also closed higher, after it reported a 3.6% rise in sales at Argos, with online sales now representing 46% of the GBP1.81 billion total. The increase was fueled by sales of electrical products such as video gaming, tablets, televisions and white goods. Homebase reported a 2.3% increase in sales in the 18 weeks to January 4.
Dixons Retail also reported a strong Christmas period, particularly during promotional periods like the "Black Friday" weekend and Boxing Day. Group sales were up 2%, while its UK & Ireland operations posted growth of 4%, or 5% on a like-for-like basis. However, it ended down 5.6%, the third-biggest faller on the FTSE 250 as it warned about its prospects over the next few months.
SVG Capital, closing down 8.9%, was another big faller on the FTSE 250, after Aegon NV revealed that it plans to sell a 7.5% stake in the private equity business.
In Europe, Germany's DAX closed down 0.2% while the CAC in Paris ended down 0.3%. In the US, the DJIA was trading down 0.5%, while the S&P 500 was down 0.3% and the Nasdaq composite was down 0.1%
There were no major UK macro-economic data released on Thursday.
In Europe, the final readings of both the German and the wider eurozone inflation came in as expected.
Consumer prices in the currency bloc rose 0.8% year-on-year in December, a slight slowdown from the 0.9% rise seen in November, while on a monthly basis, prices rose by 0.3%, from a negative 0.1% reading in November. Meanwhile, German consumer prices rose 1.4% year-on-year and 0.4% month-on-month in December.
It was a similar story in the US, where CPI rose in line with economist estimates in December. The Labor Department said its consumer price index rose by 0.3% in December after coming in unchanged in November.
The Labor Department also revealed that first-time claims for US unemployment benefits showed a modest decrease in the week ended January 11. The report said initial jobless claims edged down to 326,000, a decrease of 2,000 from the previous week's revised figure of 328,000, coming in fractionally better than the expected dip to 328,000 from the 330,000 originally reported for the previous week.
A better-than-expected reading in the Philadelphia Fed manufacturing survey added to the strong New York Empire State manufacturing index data released Wednesday. Manufacturing growth in the Philadelphia-area jumped to 9.4 in January from a revised 6.4 in December, coming in well ahead of the more modest rise to 8.6 that economists had been expecting.
In another quiet data calendar Friday, UK retail sales figures are released at 0930 GMT. In the US, building permits and housing starts information are scheduled for 1330 GMT, ahead of the Reuters/Michigan consumer sentiment index at 1455 GMT.
In the corporate calendar, blue-chip William Hill is joined by FTSE 250-constituent Spectris in providing a trading statement, while mid-cap Evraz releases its full-year operational results.
By James Kemp; [email protected]; @jamespkemp
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