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LONDON (Alliance News) - UK shares are trading lower Wednesday mid-morning, with investors focusing in corporate news and earnings reports amid lack of important economic data, with the exception of the release of meeting minutes from the Bank of England, which sent the pound higher.
The FTSE 100 is trading down 0.6% at 7,018.64, while the FTSE 250 is down 0.4% at 17,634.18. The All AIM-Share is down 0.3% at 749.04.
European indices also are lower, with the CAC 40 in Paris down 0.3% and the DAX 30 in Frankfurt down 0.1%.
The Bank of England's nine-member rate-setting body in April once again decided unanimously to leave its key interest rate and the size of asset purchases unchanged, as policymakers took note of a strengthening in euro-area economic activity and the prospect of UK inflation turning negative in coming months.
"All Committee members agreed that it was appropriate to leave the stance of monetary policy unchanged at this meeting, although two members regarded this month's decision as finely balanced," the minutes of the April 8-9 meeting read. "There was a range of views over the most likely future path of Bank Rate, but all members agreed that it was more likely than not that Bank Rate would rise over the three-year forecast period."
The pound rose sharply following the release of the minutes and trades at USD1.5045.
On the corporate front, Tesco said it swung to a big loss in its recently-ended financial year, after booking a staggering GBP7.0 billion of impairments, writedowns and restructuring charges, as it tried to put a difficult year behind it and get back on track in a revamp that new Chief Executive Dave Lewis admitted is going to take a long time.
"Things are worse than we thought for this fallen giant. The GBP6.38 billion loss is the worst in Tesco?s 97-year history and highlights the true magnitude of its problems," says Alex Joyner, senior equity analyst at Galvan Research.
Tesco reported a pretax loss for the year ended February 28 of GBP6.38 billion, compared with a profit of GBP2.26 billion a year earlier, as it booked GBP5.61 billion of impairments, mainly on its property portfolio, GBP570 million of stock-related charges, GBP416 million in restructuring costs, and a GBP208 million adjustment accounting for profit overstatements in previous years.
Its closely-watched trading profit, which excludes the one-off items, dropped by 59% to GBP1.39 billion as revenue fell to GBP62.3 billion, from GBP63.6 billion the year before, although it said UK like-for-like sales volumes were up for the first time in over four years, driven by better availability, service and pricing.
The supermarket chain confirmed that it will not pay a final dividend for the year. Its shares are flat at 234,83 pence, having drifted between gains and losses since the market opening.
Rolls-Royce Holdings, up 3.8%, is the best performer in the FTSE 100. The aerospace and engineering group said Chief Executive John Rishton will retire on July 2 and be succeeded by former ARM Holdings CEO Warren East, who was CEO of the chip designer from 2001 to 2013, and became a non-executive director on the Rolls-Royce board in January 2014.
Travis Perkins is the second biggest gainer in the blue-chip index, up 2.2%. The builders merchant said total sales rose 7.2% and like-for-like sales grew 5.1% in the first quarter of 2015, keeping well ahead of its medium-term like-for-like sales growth target. It said strong growth in its general merchanting, consumer and contracts businesses more than offset a 3.7% decline in total sales and 6.1% decline in like-for-like sales in its heating and plumbing business.
On the flip-side, Hargreaves Lansdown is the worst performer, down 3.8%, after being downgraded by Jefferies to Hold from Buy.
BP Chief Executive Bob Dudley has said the company has no appetite for a mega-merger, cooling speculation that the takeover of BG Group by Royal Dutch Shell will spark a wave of deals in the oil and gas industry, the Financial Times reports.
BP shares are trading down 0.3% and Royal Dutch Shell 'A' is down 0.7%, while its 'B' shares are down 0.6%.
Separately, BP is seeking buyers for up to USD2 billion worth of its US pipelines and storage terminals as the group seeks to offload some of its non-drilling infrastructure, Bloomberg reported on Tuesday. The oil company has sent offering materials to potential buyers of two of its assets in the past fortnight, Bloomberg said, citing people familiar with the matter.
In the FTSE 250, Croda International is the biggest gainer, up 3.5%. The specialty chemicals company on Wednesday said 2015 has started in line with its expectations and said it expects growth to continue through the year on the back of strong performances in its Personal Care and Life Sciences businesses.
Ladbrokes is one of the worst performers stocks in the mid-cap index, down 2.8%, after it said many of its customer metrics improved in the first quarter of 2015 but said betting results have favoured customers and its profits were materially lower in the period. Group net revenue was up 3.3% in the quarter, with UK retail net revenue up 4.3% and digital net revenue up by 9.5%, despite the latter taking a big hit from a sharp fall in revenue from its Sportsbook business which was offset by a good performance in Australia.
Still in the economic calendar Wednesday, eurozone consumer confidence is due at 1500 BST. In the US, the house price index is at 1400 BST, existing home sales are at 1500 BST, and EIA crude oil stocks are at 1530 BST
US futures point to a lower open, with the DJIA and the Nasdadq 100 pointed down 0.6% and the S&P 500 pointed down 0.4%.
By Daniel Ruiz; danielruiz@alliancenews.com
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