11th Feb 2015 17:06
LONDON (Alliance News) - London stock indices closed lower Wednesday amid a heavy day of corporate news and a fall in oil prices, while investors await an outcome from negotiations between Greece and European authorities over the country's debt programme.
The FTSE 100 closed down 0.2% at 6,818.17, the FTSE 250 ended down 0.2% at 16,632.60, and the AIM All-Share closed down 0.4% at 696.93.
Stocks also closed lower in Europe, with the French CAC 40 ending down 0.4%, and the German DAX 30 closing fractionally lower.
Wall Street was trading largely lower at the close of European stock markets. The DJIA was down 0.2% and the S&P 500 down 0.1%, while the Nasdaq Composite was up 0.3%.
Investors have been cautiously awaiting news from the meeting between the Greek finance minister and his European counterparts, which got underway just as the London market was closing, but hopes are low for any significant decisions to be made any time soon.
"As the eurozone waited for something to happen, investors lacked faith in its leaders to enact any change in the short term, causing the markets to mope about the day flitting between losses and gains. This was compounded by the fact that eurozone ministers have given themselves to next Monday to come up with a solution to the Greek-debt situation, further reducing the chances for decisive comments this week," said Connor Campbell, financial analyst at Spreadex.
Oil was back in focus after it fell heavily Wednesday. Brent hit a low of USD53.90 a barrel after starting the day at USD56.76 a barrel. West Texas Intermediate also slid, reaching a low of USD47.84 a barrel after starting at USD50.51.
Oil related stocks were amongst the biggest fallers in the FTSE 100 and FTSE 250. Tullow Oil, was the worst blue-chip performer, down 7.2%. BG Group, down 2.1%, was another big faller.
In the FTSE 250, Premier Oil fell 6.4%, while Hunting closed down 5.7%, Nostrum Oil & Gas 4.8%, Ophir Energy 4.5%, Cairn Energy 4.0%, and Afren 3.8%.
Adding to the gloom surrounding oil shares, Tullow Oil suspended its final dividend for 2014. The oil exploration and production company said it swung to a USD2.04 billion pretax loss for 2014 from a USD313 million pretax profit in 2013 after booking significant impairment charges, combined with falling production and revenue in the year.
In an interview with Alliance News, Chief Executive Aidan Heavey said Tullow is focused on retaining as much cash in the business until the middle of 2016 when its flagship TEN project in Ghana comes into production, hinting that the dividend may remain suspended for the next one to two years.
Sky and BT Group shares had differing fortunes following the announcement of English Premier League football broadcast rights after the market close on Tuesday.
Sky secured five of the seven packages available, equating to 126 live games per season from a total 168 matches, for a cost of GBP1.32 billion per year, whilst rival BT secured two packages, or 42 live games a season for a cost of GBP320 million per year.
BT closed as the second biggest FTSE 100 riser, closing up 3.7%, while Sky was amongst the biggest fallers in the index, down 1.2%.
IG market analyst Alastair McCaig said the two stocks' performances reflects that "BT has come out of the bidding in far greater shape than Sky as it has managed to maintain its share of coverage while avoiding the 70% increase in fees that Sky has had to fork out."
William Nicholls, dealer at London Capital Group, added: "BT keeps the pressure up on Sky, securing only marginally more games than before but continually moving forward with their 'quad-play' plans. 1-0 to BT v Sky in the share price reaction."
Reckitt Benckiser closed as the third best blue-chip performer, up 3.3%, after the consumer goods group's fourth-quarter net revenue growth beat market expectations, and the group announced further cost-cutting initiatives and plans to bolster its share-buyback programme in 2015.
Chip designer ARM Holdings, up 3.8%, was the best FTSE 100 performer. The company raised its dividend as it posted an increase in profit for 2014, boosted by strong licence revenue growth and improved royalty revenue growth in its fourth quarter, and said it expects to meet market expectations for dollar revenues in 2015.
Redrow was the best performer in the FTSE 250, up 16%. The housebuilder doubled its interim dividend, as it reported its pretax profit also nearly doubled on the back of higher revenue and a rise in sales in the first half. It said its pretax profit for the six months to the end of December was GBP91.2 million, up from GBP47.5 million last year. Revenue in the half rose to GBP560.6 million from GBP363 million, with gross margins rising to 22.4% from 20.3%.
Data centre operator Telecity Group agreed to take over European data centre services provider Interxion Holding in an all-share merger. It also posted a lower profit for 2014 due to exceptional costs mostly relating to its Turkish business but said it will begin a GBP400 million share buy-back programme over three years. The FTSE 250-listed company closed up 15%.
Dunelm Group, up 7.2% was another big mid-cap gainer. The homewares retailer delivered a higher first-half profit, driven by a 14% increase in revenue, helped by new store openings and strong growth online. However, the group cautioned it expects benefits of top-line growth in the remainder of the financial year to be largely offset by higher operating costs, saying it expects to return to stronger profit growth next year.
Lonmin closed down 7.5%, the worst FTSE 250 performer, after Glencore said it will divest its 23.9% stake in the platinum miner during the first half of 2015 by distributing Lonmin shares to Glencore shareholders. Glencore shares ended flat.
Poundland Group ended down 6.5%, after US private equity firm Warburg Pincus sold a larger-than-expected stake in the retailer.
In the economic calendar Thursday, German consumer price index is due at 0700 GMT, the Bank of England's quarterly inflation report is due to be released at 1030 GMT. In the afternoon, US retail sales for January is at 1330 GMT.
In the UK corporate calendar, Shire will release its full-year results at 1200 GMT, while Rio Tinto is due to release full-year results at 0600 GMT. At 0700 GMT, publishing firm Informa and ceramic products producer Morgan Advanced Materials will release full-year results. Lancashire Holdings will report fourth-quarter results, while online property listings company Zoopla Property Group and sugar company Tate & Lyle both will issue interim management statements. Imperial Tobacco Group will release a first-quarter interim management statement.
By Neil Thakrar; [email protected]; @NeilThakrar1
Copyright 2015 Alliance News Limited. All Rights Reserved.
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