GOG.L Share News (GOG)

LONDON (Alliance News) - Shares in London were mixed Wednesday midday, with Anglo American hitting a new all-time low and Ashtead Group leading blue-chip gainers, while Wall Street also was seen mixed with oil prices in focus ahead of US energy stocks data.

The FTSE 100 index was up 0.1% at 6,139.83 points, though having given back some of its early morning gains. The FTSE 250 was down 0.1% at 17,170.27, while the AIM All-Share was up 0.1% at 736.75.

"After an initial positive start this morning equity markets in Europe have struggled to push significantly higher after yesterday's sharp losses," said CMC Markets chief market analyst Michael Hewson.

"Once again it's been the basic resource sectors that have acted as an anchor on the overall market with Anglo American once again leading the decliners...as iron ore prices continue to slip lower, though copper prices do appear to be holding up," Hewson noted.

The overall mining sector appeared to be recovering at the open from a heavy fall on Tuesday, when London's FTSE 350 mining sector index fell to its lowest level since August 2004.

However, Anglo American soon fell back to the bottom of the blue-chip index, alongside other mining stocks, following its announcement of a radical restructuring plan on Tuesday and the suspension of its dividend.

Anglo American was down 9.3% at 293.05 pence at midday, adding to its 12% loss on Tuesday. The miner hit a new record low of 277.60p on Wednesday. The stock also was downgraded to Underperform from Hold by Jefferies, according to traders.

Fellow miner Fresnillo was down 5.5%, with Antofagasta down 2.5% and Glencore down 0.3%. However, other miners remained on the green. Rio Tinto was up 2.4% and BHP Billiton up 0.9%.

At the top of the FTSE 100 was Ashtead Group, up 7.9%. The industrial equipment rental company said its pretax profit and revenue both surged in the first half with good performances from its US and UK divisions, prompting a 33% hike to its interim dividend and the company to say its full-year results should beat its previous expectations.

Ashtead said its pretax profit for the half to the end of October rose to GBP176.5 million from GBP141.7 million a year earlier, as total revenue rose to GBP648.9 million from GBP529.4 million.

The company's underlying, constant currency rental revenue grew 17% in the first half, driven by a further strong performance from its Sunbelt unit in the US, where rental revenue increased 22%, despite the group facing some challenge from the slowdown in oil and gas markets, which will continue into the third quarter.

In the FTSE 250, Entertainment One was the best performer, up 12% at 157.94p, benefiting from an upgrade to Buy from Reduce by Peel Hunt, following the recent decline in the company's shares, which saw stock fall to a three-year low of 134.00p on Tuesday.

The television and film production company reiterated confidence in its target of doubling the size of its business by 2020 through "strong organic growth" and carefully targeted acquisitions.

The company recently priced its GBP285 million offering of 6.875% senior secured notes, using the proceeds to refinance its existing credit facilities in full. It noted that its refinancing provides its with greater flexibility when undertaking acquisitions and other corporate activity. However, some analysts have expressed concern about the issue's pricey coupon.

Transport stocks were travelling in opposite directions, with Stagecoach Group by far the worst mid-cap performer and Go-Ahead Group also in the red, while FirstGroup shares were climbing.

Go-Ahead was down 3.2%. The transport operator lost on the TransPennine Express and Northern rail franchises in the UK. The TransPennine contract was given to rival FirstGroup, up 1.3%, while the Northern franchise went to Arriva.

FirstGroup, announcing its contract win, said more than GBP500.0 million will be invested in the franchise, including a large increase in the number of carriages which will drive capacity up by around 80% at peak times.

Meanwhile, Stagecoach dropped 13% after giving a cautious outlook for the second half of its financial year, blaming fears arising after the Paris terror attacks for slowing revenue growth in its rail and inter-city coach services in the UK and Continental Europe and saying its UK regional bus services have performed below expectations.

The company said its pretax profit for the half to the end of October fell to GBP90.8 million from GBP98.3 million, mainly due to higher one-off financing charges in the half. Stripping out the one-offs, pretax profit rose to GBP121.5 million from GBP108.6 million.

However, the company said it is cautious on its outlook for the second half, with recent revenue from its regional bus business in the UK coming in softer than expected and as rail and inter-city coach revenue growth slowed in the UK and Europe since mid-November. This has resulted in Stagecoach "modestly" downgrading its adjusted earnings per share guidance for the full year.

Europe's main stock indices were lower, with the CAC 40 in Paris and the DAX 30 in Frankfurt down 0.3% and 0.1%, respectively.

US stocks were called for a mixed open, with the Dow 30 seen up 0.1%, the S&P 500 flat and the Nasdaq 100 down 0.1%.

Oil prices will be closely watched when the US Energy Information Administration's crude oil stocks are announced at 1430 GMT.

Crude prices were off their newly made seven-year lows, with Brent priced at USD40.78, having hit a low of USD39.80 a barrel on Tuesday. West Texas Intermediate was trading at USD38.07 a barrel, compared to its low of USD36.61.

Elsewhere in a quiet economic calendar, US wholesale inventories are at 1330 GMT.

In Asia Wednesday, the Nikkei 225 index in Tokyo closed down 1.0%, the Shanghai Composite ended up 0.1% and the Hang Seng in Hong Kong down 0.5%.

Chinese inflation rose by more than expected in November suggesting that measures taken to boost economic growth are beginning to spur domestic demand. Consumer prices rose 1.5% year-on-year in November, faster than the 1.3% growth seen in October, as both food and non-food price inflation picked up, the National Bureau of Statistics said.

Inflation also exceeded the expected rate of 1.4%. Despite the acceleration, overall inflation remains well below the government's full year target of around 3%.

By Daniel Ruiz; danielruiz@alliancenews.com

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