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LONDON (Alliance News) - UK stock indices were trading narrowly mixed Wednesday morning, amid a busy day of corporate news which sees Meggit the worst performer in the FTSE 100 after a profit warning.
Meggit shares were down 21% just after the open after it said trading in the third quarter of 2015 had been below its expectations, with little optimism for any relief in the fourth quarter.
The aerospace and defence components manufacturer said there was a "marked deterioration" in trading in September, with organic growth in its civil original equipment sales more than offset by weaker-than-anticipated trading in civil aftermarket, military and particularly energy markets, the latter hit hard by the downturn in spending from oil and gas customers.
The FTSE 100 traded up 0.1% at 6,373.62 points, the FTSE 250 index was down 0.1% at 17,035.98 , and the AIM All-Share was down 0.1% at 742.50.
In Europe, the French CAC 40 was up 0.2% and the German DAX 30 was up 0.1%.
Asian stocks closed mixed Wednesday. The Japanese Nikkei 225 index closed up 0.7%, the Hang Seng in Hong Kong closed down 0.8% and the Shanghai Composite ended down 1.7%.
Also in the FTSE 100, Lloyds Banking Group traded down 4.2% after it booked a further GBP500 million in relation to compensating customers who were mis-sold insurance products in the past.
The new GBP500 million charge for payment protection insurance, which was meant to protect policyholders repay debt in the event of illness, redundancy or death but was widely mis-sold, means Lloyds has now set aside GBP13.9 billion over the scandal.
However, the bank said pretax profit rose to GBP958 million in the quarter to September 30, compared with GBP751 million in the corresponding three months the prior year. Underlying profit, which excludes charges taken on asset sales and provisions for payment protection insurance claims, slipped to GBP1.97 billion from GBP2.04 billion.
BT Group was the best blue-chip performer up 4.4%. The company said the UK Competition and Markets Authority has provisionally cleared its proposed GBP12.5 billion acquisition of mobile operator EE. The clearance from the UK antitrust regulator has been given without any remedies required to gain approval.
The CMA said it has provisionally decided the deal "is not expected to result in a substantial lessening of competition in any market in the UK". BT said this includes the supply of retail mobile, wholesale mobile, mobile backhaul, wholesale broadband and retail fixed broadband services.
British American Tobacco was another top performer in the FTSE 100, up 2.0%. The tobacco company reported a fall in sales in the first nine months of 2015 as it was hit by movements in foreign exchange rates, which it warned may harm operating profit in the full year.
It said revenue was driven by strong pricing, but that it was hit by significant movements in many of its key trading currencies.
In the FTSE 250, Bwin.Party Digital Entertainment was one of the leading gainers, up 2.6% even though it reported a fall in revenue in the first nine months of 2015 as it faced a tough comparative period while being hit by VAT charges from the European Union.
The online gaming company said total revenue in the nine months ended September 30 decreased 8% to EUR429.9 million from EUR465.8 million the year before, which it said reflected the absence of a major football tournament, the sale of non-core businesses and the impact of EU VAT.
The comparative period included the football World Cup which helped boost sales last year.
Meanwhile, Petra Diamonds was the heaviest faller in the index, down 6.2% despite saying production reached record levels in the first quarter of the financial year and said the weakening of the South African rand is mitigating the steep fall in diamond prices.
The diamond miner produced a "record" 842,796 carats in the first quarter ended September 30, compared to 833,744 carats a year earlier. That figure means the company is running ahead of its guidance for the first half of the year to produce 1.5 million carats.
GlaxoSmithKline is expected to provide its third-quarter results at midday.
In the midst of all the corporate news, investors will be keeping one eye on the US Federal Reserve's monetary policy decision after the London close. Analysts largely expect the Federal Open Market Committee to hold steady interest rates at its October meeting, but market participants will closely inspect the policy statement for any indication of whether a rate hike in December is still on the table.
The Fed will announce its policy decision at 1800 GMT but is not scheduled to hold a press conference.
Still ahead in the economic calendar, aside from the Fed decision, there are US MBA mortgage applications at 1100 GMT and Energy Information Administration crude oil stocks at 1430 GMT.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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