BP Share News (BP.)

LONDON (Alliance News) - Shares in London were mostly lower Thursday midday, with commodity stocks giving back their recent gains, while Wall Street was called for a positive open with jobs data and non-farm productivity data in focus.

The Bank of England's Monetary Policy Committee remained dovish, voting 8-1 to keep UK interest rates on hold at 0.5%. Some analysts had expected one or two more members to vote for an increase. The central bank said it expects UK inflation to return to its mandated target of 2% in about two years. It added the committee thinks the overall pace of economic growth will be more modest than had been expected in August.

On Wednesday, US Federal Reserve chief Janet Yellen had said that the US central bank could begin the long-awaited tightening of monetary policy as early as December.

In testimony before a congressional committee, Yellen reiterated the Fed's October statement that the bank's monetary policy committee expects the US economy to continue to grow "at a pace that's sufficient to generate further improvements in the labour market and to return inflation to our 2% target over the medium term."

Earlier Thursday, minutes from the Bank of Japan's October 6-7 meeting revealed that members of the central bank's monetary policy board said Japan's economic recovery continues to move forward. The members said that inflation is expected to remain close to flat for the foreseeable future because of weak energy prices.

The Japanese central bank refrained from adding more monetary stimulus, maintaining its target of raising the monetary base at an annual pace of about JPY80 trillion. The bank also left its benchmark lending rate unchanged at 0.10%.

The FTSE 100 index was down 0.4% at 6,389.78 points following the Bank of England announcement and ahead of a press conference starting at 1245 GMT with Governor Mark Carney. The FTSE 250 was down 0.4% at 17,111.76, and the AIM All-Share was flat at 747.21.

In Europe, the CAC 40 in Paris and the DAX in Frankfurt were both up 0.8%.

In Asia on Thursday, the Shanghai Composite index finished up 1.8%, while the Hang Seng in Hong Kong ended flat. The Japanese Nikkei 225 index closed up 1.0%.

US stocks were called higher, with the Dow 30, the S&P 500 and the Nasdaq 100 all seen up 0.2%. A positive open would take back some of the losses seen Wednesday, with Dow ending down 0.3%, the S&P 500 down 0.4% and the Nasdaq Composite down 0.1%.

The US earnings season continues, with third-quarter updates from polo shirt maker Ralph Lauren and media company Time Inc before the US open, while the same from food company Kraft Heinz and entertainment giant Walt Disney are due after the US market close.

Late Wednesday, social network Facebook reported strong growth in earnings for the third quarter, with net profit up about 11% year-on-year to USD896 million. "We had a good quarter and got a lot done," founder and chief executive Mark Zuckerberg said. Facebook said it had 1.55 billion monthly active users in the quarter to end September, including more than 1 billion who logged on every day - an increase of 17% from the same period in 2014.

In the US data calendar, jobs data and non-farm productivity data are due to be published at 1330 GMT. Federal Reserve Bank of Atlanta President Dennis Lockhart will give a speech after the UK equity market close at 1730 GMT.

Eurozone's economy is set to expand in 2016 at a slower pace than that expected earlier as the impact of positive factors such as falling oil prices, expansionary monetary policy and a weaker euro fades, while new challenges such as emerging market slowdown emerge, the European Commission said Thursday.

In its Autumn 2015 forecast, the executive arm of the EU said the euro area gross domestic product is set to grow by 1.6% this year, slightly faster than the 1.5% predicted in May. However, the commission lowered the projection for next year to 1.8% from 1.9%. Eurozone growth was projected to improve to 1.9% in 2017.

The commission retained its euro area inflation projection for this year at 0.1%, while it slashed the outlook for next year to 1% from 1.5%. Headline inflation was forecast at 1.6% in 2017.

Eurozone retail sales decreased unexpectedly in September after remaining flat in the previous month, figures from Eurostat showed Thursday. Retail sales edged down 0.1% month-on-month in September, missing economists' expectations for a 0.2% increase. Sales of food, drink and tobacco dropped 0.6% annually in September, while sales of non-food products went up by 0.1%.

Meanwhile, data from Destatis showed that Germany's factory orders declined unexpectedly in September due to a notable decrease in foreign demand. Factory orders fell 1.7% month-on-month in September, confounding expectations for a 1% rise. This was the third consecutive fall in orders.

In the UK, survey data from the Lloyds Banking Group's Halifax division showed that house prices increased 1.1% in October from a year ago, reversing a 0.9% drop in September. Economists had forecast only 0.6% growth for October.

On the London Stock Exchange, oil stocks and miners were dragging down both the blue-chip and mid-cap indices.

Oil stocks were giving back the gains made at the start of the week, when they had benefited from a rise in oil prices above the USD50 line. Brent oil, quoted at USD48.67 a barrel Thursday midday, remained lower after having fallen to USD48.68 at the London close on Wednesday.

BP and Royal Dutch Shell 'B' shares were down 2.8%, while BG Group was down 1.9%. In the FTSE 250, Premier Oil was down 8.1%, Ophir Energy down 3.1% and Tullow Oil down 6.8%.

Amec Foster Wheeler shares lost 25%. The oil and gas engineering services company warned on its outlook for the remainder of the year and into 2016 as it said margin deterioration will hit its second-half results and said it will slash its dividend in half in order to cope with the tough conditions.

It said its underlying revenue for the full year has been in line with expectations in the first nine months of 2015, but said that due to the ongoing weakness in oil and gas markets, its second half margins will be weaker than the first due to continued pricing pressures and an adverse revenue mix.

Meanwhile, miners were also giving back gains they made after a better-than-expected services activity from China on Wednesday. The FTSE 350 Mining Sector Index was down 2.4%, one of the worst performing sector indices.

Among its constituents, Anglo American was down 6.4%, Antofagasta down 2.8% and Petra Diamonds down 6.8%.

Fellow miner Randgold Resources was down 2.8% after it said its revenue from gold sales dipped in the third quarter, leaving its profit for the period lower, as it continued to deal with the tough conditions in commodities markets.

Outside commodities, Wm Morrison Supermarkets was among the biggest fallers at the open, down 4.2%, after it said sales fell in the third quarter of its financial year as it continued to invest in price cuts amid a deflationary UK grocery market.

The FTSE 100-listed food-store chain said total sales excluding fuel were down 2% in the 13 weeks to November 1, on the same period the year before, or down 4.6% including fuel. Like-for-like sales declined 2.6% excluding fuel, and 5.1% including fuel.

Despite this, Morrisons said that there was good progress during the quarter against many aspects of its plan, and that it is continuing to invest in lower prices.

At the top of the blue-chip index, AstraZeneca was up 3.2% after it said its operating profit increased in the third quarter and was ahead for the year to date, as AstraZeneca upgraded its revenue guidance for 2015 in constant currencies. The pharmaceutical giant said its operating profit for the third quarter to the end of September rose to USD137.0 million from USD116.0 million a year earlier, helped by an improvement in margins in the half.

AstraZeneca upgraded its revenue guidance for the full year in constant currencies to expectations for a broadly flat performance against 2014, having previously guided to a low-single-digit percentage decline.

RSA Insurance Group was up 2.7%. The insurer said it enjoyed a good performance in the third quarter despite a "distraction" arising from the takeover interest from Swiss insurer Zurich Insurance Group, which has since withdrawn from talks to buy its London-listed rival. Year-to-date net attributable profits are ahead of RSA's plans, the company said, with third-quarter profit including GBP21.0 million in disposal gains from the sale of its Indian associate, bringing total disposal gains for the year-to-date to GBP153.0 million.

In the FTSE 250, clothing retailer SuperGroup, which owns the Superdry brand, was up 7.5% after it reported growth in revenue in the first half of its financial year, boosted by sales increases in both retail and wholesale, and said its gross margin is expected to be ahead of full-year guidance. SuperGroup said total group revenue rose 22% in the 26 weeks ended October 24 to GBP254.9 million from GBP208.2 million in the same period the year before.

Kitchens and joinery products manufacturer Howden Joinery Group was up 6.3% after it said trading has remained strong so far in the second half of 2015 and it remains confident on hitting its expectations for the full year. Howden said its UK depots total revenue for the four months to the end of October rose 13% against tough year-before comparatives.

On AIM, Altona Energy jumped 55%. The coal miner said it and its partners on the Arckaringa coal project in Australia reached an agreement on amended terms of the partnership. Altona said its partners, Sino-Aus Energy Group and Wintask Group, will invest a maximum of USD33.0 million in four stages in the project. An initial drilling programme will be planned as part of a bankable feasibility study, set to be completed within three years. In addition, Sino-Aus will provide GBP1.25 million in working capital to Altona in two tranches, subject to certain conditions.

By Daniel Ruiz; danielruiz@alliancenews.com

Copyright 2015 Alliance News Limited. All Rights Reserved.