27th Mar 2015 17:06
LONDON (Alliance News) - London's main stock indices ended lower for a fourth consecutive day Friday, with the FTSE 100 ended down 2.4% over the week even though it hit a new all-time high on Tuesday as investor sentiment was dented by geopolitical concerns and a sell-off in technology stocks.
The FTSE 100 closed down 0.6% at 6,855.02 Friday, after setting a new intraday high of 7,065.08 on Tuesday, while the FTSE 250 closed down 0.6% at 17,162.64. The AIM All-Share index outperformed, ending up 0.1% at 717.60.
Europe's main stocks indices outperformed London, with the French CAC 40 closing up 0.6% and the German DAX 30 ended up 0.2%. At the close of the European stock markets, the DJIA and S&P 500 were both flat and the Nasdaq Composite was up 0.2%.
Miners and oil-related stocks in the resource-sector heavy FTSE 100 were again amongst the worst performing stocks in the index.
The escalating conflict in Yemen caused oil prices to rise on Thursday, but prices slipped back again on Friday, causing oil-related stocks to fall in London. At the close of London stock markets, Brent oil was quoted at USD57.67 a barrel and West Texas Intermediate was at USD49.94 a barrel.
"Crude oil erased some of yesterday's Yemen-related gains as the inevitable realisation that there will be no supply-disruption began to get priced in. The pile-up in US crude oil stocks was added to again this week by 8.17 million in a clear demonstration of over-supply that isn't going to be outweighed by conflict in a marginal producer such as Yemen," said Jasper Lawler, market analyst at CMC Markets.
Weir Group, down 3.6%, and Royal Dutch Shell 'B', down 1.8%, were amongst the biggest fallers in the FTSE 100. Tullow Oil, down 3.9%, Hunting, down 3.6%, and Premier Oil, down 3.5%, were amongst the biggest fallers in the FTSE 250.
Mining stocks performed even worse, with the FTSE 350 Mining sector index the worst-performing sector index, as metals prices also fell. Anglo American ended down 3.0%, Randgold Resources down 3.0%, and Glencore down 3.3%.
Precious metals miners were down due to a fall in gold and silver prices. Having touched notable highs on Thursday, gold slipped to a low of USD1,192.40 an ounce while silver touched a low of USD16.824 an ounce.
London's tech stocks, which had fallen sharply on Thursday in the wake of a sell-off in the sector in the US on Wednesday, performed slightly better on Friday. ARM Holdings ended down just 0.1%, while in the FTSE 250 Sage ended down 0.9% and Pace up 1.1%.
Investors were also focused on developments in Greece, as the country's government said it had finalised a list of economic reforms demanded by creditors which it will deliver to Brussels later in the day. Nikos Filis, the parliamentary representative of the ruling leftist Syriza party, told dpa that a delegation from the Finance Ministry will present the list of 18 reforms to the so-called Brussels Group of creditor representatives.
He said the government stands to earn EUR3.5 billion in 2015 from the measures, which include fighting tax evasion using a direct on-line system connecting businesses and tax offices, issuing licenses for the country's media and online gambling, and VAT increases.
Once Athens submits the reform list, it will be reviewed by its creditors and the Eurogroup Working Group, before being considered by the panel of eurozone finance ministers. The review process is expected to take at least 24 hours.
However, analysts remain cautious about the outcome of the review.
"We expect negotiations to remain protracted, and given substantial debt service in the coming weeks, we think market sentiment might turn a lot more nervous again in April," said UBS analyst Reinhard Cluse. "Our base-case scenario remains that a compromise will eventually be found, but the path towards this outcome is likely to be bumpy and the risk of failure has to be taken seriously, in our view."
In economic news, the third reading of US fourth quarter GDP missed expectations. A report by the Commerce Department showed that annualised GDP increased 2.2% in the fourth quarter, unchanged from the growth estimated last month. Economists had been expecting the pace of GDP growth to be revised to 2.4%, which would still reflect a notable slowdown from the 5.0% growth seen in the third quarter.
However, US stocks were buoyed by a report from the University of Michigan which showed consumer sentiment deteriorated by less than initially estimated in March. The report showed that the final reading on the consumer sentiment index for March came in at 93.0 compared to the mid-month reading of 91.2. The final reading came in above economist estimates for 92.1 but was still below the final February reading of 95.4.
US markets are awaiting a speech that Federal Reserve Chair Janet Yellen will deliver at the Federal Reserve Bank of San Francisco at 1945 GMT.
Elsewhere on the London Stock Exchange, Carnival closed as the best performer in the FTSE 100 ending up 3.9%. The cruise operator reported a turnaround to profit in the first quarter, reflecting lower operating costs that more than offset a decline in revenue. Adjusted earnings per share topped analysts' expectations, while quarterly revenues missed estimates.
Royal Bank of Scotland Group, down 1.9%, was one of the biggest blue-chip fallers. The bank confirmed it has struck a deal to sell the international operations of its Coutts private banking and wealth management business to Swiss firm Union Bancaire Privée. The sale will include client relationships outside of the UK and associated staff, RBS said. RBS confirmed it will retain the UK private banking and wealth management operations of Coutts.
HomeServe, up 2.3%, was one of the best FTSE 250 performers. The home emergency services company said it is trading in line with expectations for the year to the end of March. In a short trading statement, the company said trading across the company in the final quarter of its financial year has been good, with retention and marketing activities both performing well.
Messaging International was one of the biggest decliners in the AIM All-Share index, closing down 21%. The messaging services company said it expects revenue from its text-to-landline service to decline in 2015 due to a change in arrangements with a key customer, though it said it expects better margins to partially offset the hit to its results and said it is seeing good demand for its TeleMessage service.
In the economic calendar Monday, UK consumer credit and mortgage approval data is due at 0930 BST, eurozone consumer confidence is at 1000 BST and German consumer prices at 1300 BST. Later in the day, US personal income and spending data is at 1330 BST and pending home sales is at 1500 BST.
In the corporate calendar full-year results are due from AA, Polymetal International, and Al-Noor Hospitals Group. There is also a trading update from Compass Group.
By Neil Thakrar; [email protected]; @NeilThakrar1
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