BP Share News (BP.)

LONDON (Alliance News) - UK stocks are mixed Friday midday with Wall Street called for a negative open, as oil prices continue to fall even as China eased market concerns by slightly raising the value of the yuan after three consecutive days of devaluation.

Meanwhile, Greece moved a step closer to its third debt bailout.

In London, the FTSE 100 index is down 0.1% at 6,559.30, the FTSE 250 trades up 0.3% at 17,638.16, and the AIM All-Share is flat at 750.43. In Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt are both down 0.5%.

US stocks are called for a lower open, with the DJIA, the S&P 500 and the Nasdaq 100 all pointed down 0.2%.

West Texas Intermediate oil fell to a new six-and-a-half year-low on Thursday at USD41.65 a barrel, while Brent oil hit a low of USD48.82 a barrel. At midday Friday WTI is at USD42.07 and Brent is at USD49.51.

"The US oil price fell to new six-and-a-half year lows early on Friday ahead of Baker Hughes rig count data released later that could see another increase," says CMC Markets analyst Jasper Lawler. "More US rigs would raise concerns that US oil output will remain elevated, adding to the global supply glut and could help push US crude prices in the direction of USD40 per barrel."

The Baker Hughes oil rig count data is expected at 1900 BST. Also ahead in the US economic calendar there is the producer price index at 1330 BST and capacity utilisation at 1415 BST, alongside US industrial production.

As a result of falling oil prices, London-listed oil-related stocks also are lower, with Weir Group down 1.0%, BP down 1.2% and Royal Dutch Shell 'A' shares down 1.0%. In the FTSE 250, John Wood Group is down 2.2%, Hunting is down 2.1% and Petrofac is down 1.7%.

The FTSE 350 Oil Equipment Services & Distribution index is the worst performing sector index, down 1.4%, followed by the FTSE 350 Oil & Gas Producers index, down 0.9%.

Liberum reiterated its Sell rating on Weir and cut its price target, saying it believes that consensus estimates are too high for the engineering services company amid concerns about the minerals and oil and gas markets. Liberum cuts its price target to 1,330.00 pence from 1,450.00p. The stock trades at 1,471.00p.

In addition, the Financial Times reported that BP faces the prospect of fresh regulatory fines after a US judge ruled that its energy traders rigged the natural gas market in Texas in the aftermath of a 2008 hurricane.

Citing the judge at the Federal Energy Regulatory Commission in the US, the FT said BP traders based at the company's Southeast Gulf Texas office plotted to lose some money on physical gas positions in order to boost the value of holdings of financial derivatives tracking gas.

Outside oil companies, Zoopla Property Group trades up 1.3%, having hit an all-time high, after Panmure Gordon upgraded the property portal to Buy from Sell. The broker said the company's results for the four months from April 1 to July 31 reported Wednesday were "significantly" stronger than it had expected.

In the AIM All-Share, Safeland is up 13%. The property company reported a rise in profit in its recently ended financial year, despite a slip in revenue, as it profited from the sale of the Chandos Tennis Club in November. It reported a rise in pretax profit in the year ended March 31 to GBP6.7 million, a huge improvement on the GBP903,000 profit it made the prior year, even though revenue fell slightly to GBP10.3 million from GBP10.4 million. Safeland will pay a final dividend of 1.75 pence per share.

Churchill Mining is down 9.9%. The miner said that the Singapore hearing in its ongoing legal dispute with the Republic of Indonesia government has been completed, although it said a decision is unlikely to be handed down for "some months". The company is currently in dispute with Indonesia about getting compensation for the revocation of mining licenses relating to the East Kutai coal project in East Kalimantan, in which it has a 75% interest.

Eurozone economic growth slowed marginally in the second quarter, preliminary data from Eurostat showed. Gross domestic product expanded 0.3% sequentially in the June quarter, falling short of the rate expected by economists of 0.4%, matching the first quarter reading. Year-on-year, GDP growth improved to 1.2% from 1.0%. Nonetheless, annual growth was slightly slower than the 1.3% expansion forecast by economists.

Final data from Eurostat confirmed 0.2% inflation for July, the same rate as seen in June. On a monthly basis, consumer prices fell 0.6%. At the same time, core inflation accelerated to a 15-month high of 1.0% from 0.8% in June. The figures matched the flash estimate released on July 31.

Meanwhile, Greece moved closer to its third debt bailout. The Greek parliament approved the terms of the deal with eurozone creditors with support from the opposition, after Prime Minister Alexis Tsipras saw more deserters from his coalition. The vote followed an all-night debate, with 222 of 297 lawmakers present voting Yes, while 64 voted No. Eleven parliamentarians abstained.

Tsipras received support for the EUR86 billion bailout from 118 of the 162 members of his coalition in Parliament, his aides said. That support falls below the 120 members needed in the 300-member chamber for a minority government to continue to govern. Tsipras will continue to lead the government until the first tranche of the new bailout is paid out and will then appear before Parliament to call a confidence vote, the aides said.

The vote comes after the Financial Times reported Thursday that both the European Commission and the European Central Bank argue in a new analysis that debt relief measures, including extending repayment periods, would allow Athens to achieve debt sustainability, a solution advocated by the International Monetary Fund. They say such moves would avoid the need for a full-scale debt haircut.

The call to back debt relief puts pressure on Berlin which has been opposed to debt relief, saying that any nominal haircut would be illegal under EU treaties.

The Eurogroup of finance ministers will hold an extraordinary meeting starting at 1400 BST to discuss Greek reforms.

In China, the central bank continued to calm investor nerves by slightly raising its daily reference rate to CNY6.3975 to the dollar, compared to CNY6.4010 on Thursday. The move follows three consecutive days of devaluation by the People's Bank of China, sparking some concerns of a currency war.

The bank said earlier this week it was using a new method to calculate the central parity rate that is more responsive to market conditions. But some analysts saw the devaluation as motivated by a desire to boost exports, which become cheaper overseas as the yuan weakens.

By Daniel Ruiz; danielruiz@alliancenews.com

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