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LONDON (Alliance News) - Shares in London were lower Friday midday, dragged down by oil stocks after Brent crude reached a seven-year low, while futures in the US pointed heavily down.

"The bears have had a clean sweep this week as once more Friday saw red dominating trading screens, while the FTSE gave every sign that it was going to have a fifth selloff this week," said IG market analyst Alastair McCaig.

The FTSE 100 index was down 1.3% at 6,010.05 points, the FTSE 250 down 0.9% at 16,934.02 and the AIM All-Share down 0.5% at 728.31. In Europe, the CAC 40 in Paris was down 1.3% and the DAX 30 in Frankfurt was down 1.5%.

In Asia, the Nikkei 225 index in Tokyo closed up 1.0%, while the Shanghai Composite and the Hang Seng in Hong Kong ended down 0.6% and 1.1%, respectively.

US stock futures pointed down, with the Dow 30 and the Nasdaq 100 both seen down 0.8% and the S&P 500 down 0.7%.

In a light economic calendar, before the US Reuters/Michigan consumer sentiment index at 1500 GMT, there are US retail sales and producer price index data at 1330 GMT.

"Today's US retail sales report represents the penultimate key economic data release that could impact on market expectations for next week's US Federal Open Market Committee meeting. Yet, in the absence of a wildly weak report, it is unlikely that the data, at this stage, can meaningfully change current expectations of a hike in the US Federal Reserve Funds target rate," said Lloyds Bank economist Nikesh Sawjani.

"Instead, the report is expected to reinforce the positive mood about domestic demand with headline sales expected to strengthen to 0.4% month-on-month in November from 0.1% in October, underpinned by strong vehicle sales over the month," added Sawjani.

The next FOMC meeting is scheduled for December 15-16.

Already released Friday, data from the Office for National Statistics showed UK construction logged modest output growth during October, though it was the first increase in three months. Construction output edged up 0.2% from September, when there was stagnation. Economists had forecast 1% growth. In August, output tumbled 2%.

German inflation data which confirmed consumer prices in Europe's largest economy edged higher in November. The report by Destatis showed the harmonised index of consumer prices confirmed initial estimate of 0.3% growth in prices, compared to the 0.2% seen in October.

London-listed oil stocks were firmly in the red, after Brent oil price reached USD38.88 a barrel, a low it hadn't seen since December 2008 before slightly recovering to USD39.13 a barrel at midday.

West Texas Intermediate touched USD36.10 a barrel, still its lowest since early 2009. At midday, it was priced at USD36.29 a barrel.

Royal Dutch Shell 'B' shares were down 3.0%, while its 'A' shares were down 2.6%. BG Group was dropping 2.1%, while BP was down 1.9%. In the FTSE 250, Premier Oil and Tullow Oil were down 11.0% and 6.1%, respectively.

Miners were again on the back foot, with the FTSE 350 mining sector index on its way to ending lower after two consecutive sessions finishing higher.

Anglo American was down 5.0%, BHP Billiton down 3.8%, Glencore down 3.1%, Rio Tinto down 2.7% and Randgold Resources down 2.0%.

Old Mutual, down 8.0%, was the worst blue-chip performer, while Investec was down 8.5% in the FTSE 250, both continuing from their heavy declines on Thursday. The companies were down as the South African rand trades near record lows against the dollar following the dismissal of finance minister Nhlanhla Nene.

Both companies, which derive a great deal of their earnings from South Africa, have suffered from the weakness of the rand, and further depreciation of the currency is unhelpful when translating earnings to report accounts in sterling. On Thursday, the two companies closed down 11% apiece.

The worst mid-cap performer was International Personal Finance, down 19%, as the lender warned late Thursday it faces a hit from new legislation in Slovakia.

The company's Slovak business generated a pretax profit of about GBP6.0 million on revenue of about GBP43.0 million in the 12 months ended June 30, at which point it had a net receivables balance also of GBP43.0 million. International Personal Finance's update came one day after the Slovak parliament voted to adopt "previously undiscussed" proposals to amend various pieces of consumer legislation.

Bellway was the best performer in the FTSE 250, up 5.0%. The housebuilder continued the positive newsflow from the UK housebuilding sector as it said its reservation rate improved in the first months of its new financial year and that its total completions and average selling price are both set to rise in the full year.

The group said its reservation rate in the 18 weeks from August 1 to December 6 has increased 12% year-on-year to 165 homes per week. The strong start to the year led the group to forecast its total completions for the full year to the end of July 2016 will rise around 10% year-on-year, from the 7,752 it completed in its 2015 financial year.

Bellway added the average price of those completions will also rise by around 10%, meaning it expects its operating margin for the current financial year to increase about 21%, contributing to another anticipated improvement in its return on capital employed.

Analysts at Shore Capital said that while sales volume growth of 10% was in line with the broker's expectations, the guided operating margin increase of 21% was ahead of Shore's expectations of 20.8%.

"It may appear early to be calling this improvements, but the board did the same thing last year and they achieved what was laid out at this early stage," said Shore analyst Robin Hardy.

On AIM, Surgical Innovations Group was up 28%. The company, which designs and makes medical technology for minimally invasive surgery, said its finance director will no longer depart, while trading has improved and the company's banking facilities have been extended.

Melanie Ross will remain the finance director of the company, withdrawing her notice to resign on April 15, 2016, taking on the position of managing director of Surgical Innovations in addition to her existing responsibilities.

Pennant International Group was off 15%. The logistics services company said it has secured only one of the two key contracts it needed to meet its full year expectations had been signed.

One of those deals has been secured, but the other has not, though the company remains confident the second, with an unnamed client in the Middle East, will be won eventually. Still, the delays to these contracts have hit its results for the second half of 2015, meaning its loss in the second half will be much wider than in the first half, even though its overall cash position will have improved.

By Daniel Ruiz; danielruiz@alliancenews.com

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