26th Feb 2015 10:36
LONDON (Alliance News) - London stock indices trade largely flat mid-morning Thursday amid another busy day of UK company reporting, while the second reading of UK fourth quarter GDP came in line with expectations.
The FTSE 100 is reading slightly lower at 6,932.84 points, the FTSE 250 is fractionally higher at 17,194.04, and the AIM-All Share index is up 0.2% at 711.10.
In Europe, the CAC 40 in Paris is up 0.2%, as is the DAX 30 in Frankfurt. The German index was supported by a slightly better than expected unemployment numbers. The number of people out of work fell by 20,000, more than economists forecast a decrease of 10,000. The jobless rate came in at seasonally adjusted 6.5% in February, the same rate as seen in January and in line with economists' expectations.
The UK economy expanded in line with estimates in the fourth quarter, according to a report by the Office for National Statistics. Gross domestic product grew 0.5% sequentially in the fourth quarter, the same as the estimate released on January 27. The rate of quarter-on-quarter growth eased from 0.7% in the third quarter. In the fourth quarter, GDP was up 2.7% from a year before, unrevised from the previous estimate, while in 2014 as a whole, UK GDP advanced 2.6% from the prior year. The full-year growth figure was also left unrevised.
Another report from the ONS showed that the index of services increased 3.6% in December from last year. All the four main components of services increased from the prior year. On a monthly basis, services output climbed 0.6% in December.
Reed Elsevier is the second biggest faller in the FTSE 100, down 4.6%, behind easyJet, down 4.9%, which went ex-dividend. The Anglo-Dutch publisher announced plans to combine its UK and Dutch parent companies in an effort to simplify its corporate structure and "increase transparency" for shareholders, as it posted a rise in adjusted pretax profit for 2014.
RSA Insurance Group is another notable faller in the FTSE 100, down 2.9%. It marked a swing to pretax profit in its last financial year by resuming dividend payments, which had been put on hold as part of a broad restructuring aimed at getting the insurer back on track. RSA expects to "substantially" complete the group's strategic restructuring in 2015, while Chief Executive Stephen Hester also set out new cost saving targets.
Deutsche Bank says RSA has provided a cautious outlook, which is likely to be seen as disappointing.
Royal Bank of Scotland Group also is one of the worst blue-chip performers, down 2.8%. The bank revealed a GBP3.47 billion attributable loss in 2014 as it counted the cost of billions of pounds' worth of writedowns, restructuring, litigation and conduct. In a statement, RBS reported a GBP3.47 billion loss attributable to shareholders in the year ended December 31, 2014, a significant improvement on the GBP9.0 billion attributable loss reported in the prior year.
In an update on its outlook, RBS said it expects its core UK and Irish businesses to continue to perform well, but warned of "some income headwinds". It said that income in corporate and institutional banking in the year to date is lower than the comparable period last year. The corporate and institutional bank is also being scaled down to just 13 countries, compared with 38 at the end of the year.
Standard Chartered is amongst the best performers in the FTSE 100, up 2.3%. Peter Sands is to make his long anticipated exit as chief executive of the emerging markets bank this summer, with the company appointing Bill Winters, the former co-chief executive of JPMorgan Chase & Co's investment bank, to succeed him.
In the FTSE 250, Domino's Pizza Group leads the gainers, up 8.1%. The pizza delivery company said strong profit and revenue performance in its last financial year, driven by its UK business and successful meal-deal bundles, prompted a more than 10% increase in its dividend for the year, while it highlighted a confident outlook for the year ahead.
RPS Group, up 6.3%, is the second best performer in the index. The energy consultancy reported its pretax profit for the year to the end of December was GBP46.3 million, up from GBP43.6 million last year on the back of higher revenue and fee income and hiked its dividend payout.
Ladbrokes, up 4.2%, is another strong mid-cap gainer. The bookmaker reported a hefty drop in its pretax profit for 2014, as shop closure costs and impairment charges more than offset revenue growth during the year, but the company said it is confident in its business outlook for 2015, as it plans to expand internationally, close more betting shops, improve its online offer, and bolster its competitive position.
Still ahead in the economic calendar is US consumer price index at 1330 GMT alongside US durable goods orders.
Wall Street is indicated a higher opening. The DJIA, S&P 500, and Nasdaq 100 are all pointed up 0.1%.
By Neil Thakrar; [email protected]; @NeilThakrar1
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