23rd Oct 2013 12:55
LONDON (Alliance News) - The main UK equities indices are lower Tuesday on fears about the health of the Chinese economy and US markets look set to follow with stock futures indicating a lower open on Wall Street.
US stocks advanced on Tuesday, thanks to weak payrolls data that heightened expectations the Fed will delay the withdrawal of its economic stimulus programme. However, sentiment has turned worse, as traders look beyond their initial optimism and worry about the overall health of an economy that still has debt and budget concerns hanging over it.
Investor focus shifted from the US to China overnight as Bloomberg Businessweek reported that the country's biggest banks tripled the amount of bad loans written off in the first half, cleaning up their books ahead of what may be a fresh wave of defaults. The world's most profitable lender, Industrial & Commercial Bank of China Ltd., alongside its four largest rivals, removed USD3.65 billion of debt that could not be collected.
Ahead of the New York bell, both the DJIA and S&P are called to open 0.5% lower, while the Nasdaq is called to open 0.6% lower. All of London's major stock indices are currently trading in the red. The FTSE 100 is down 0.4% at 6,671.69, the FTSE 250 is down 0.1% at 15,498.69, and the AIM All-Share index is down 0.1% at 802.31.
At the individual UK equity level, retailers have performed well after reporting strong results. Sports Direct International, up 0.9%, is one of the biggest gainers on the blue-chip index after reporting a 19% increase in gross profit and a 15% rise in sales over the nine weeks to September 29. In a pre-close trading update, the UK's leading sports retailer by revenue, which joined the FTSE 100 last month, said that trading since the end of September has remained strong, and that it is confident in its full-year outlook.
On the FTSE 250, retailer Home Retail group, up 4.5%, is one of the biggest risers. The company has jumped despite saying that profits fell in the first-half of the year fell due to costs for restructuring Argos. However, excluding those costs, pretax profit rose by 53%. Home Retail reported a slight increase in first half revenues to GBP2.59 billion, compared with GBP2.53 billion a year earlier. The company maintained its interim dividend at 1.0 pence per share. Its benchmark pretax profit, which excludes exceptional items and store impairment charges, rose 53% to GBP27.4 million, from GBBP17.9 million a year earlier.
AIM-listed Avia Health Informatics, down 66%, is a big faller after its expanded share issue, bolstered by a GBP326,000 placing, was readmitted to AIM. The company's shares were suspended in June after it ran into difficulties when talks to license its healthcare technology failed. It then decided to sell that business and convert to an investment company focusing on graphene technology. The funds raised in the placing will be used to fund the costs of the issue, the disposal, its Company Voluntary Arrangement, and working capital.
The US house price index, scheduled for 1400 BST, is still to come in Wednesday's data calendar.
By James Kemp; [email protected]; @jamespkemp
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