Glaxosmithkline Share News (GSK)

LONDON (Alliance News) - London stock prices ended flat Wednesday, weighed down by energy-related shares, after a slide in the price of oil offset a positive UK economic reading and the decision by China's central bank to cut its reserve ratio for banks.

The FTSE 100 ended down 0.2% at 6,860.02, the FTSE 250 finished flat at 16,571.64, while the AIM All-Share closed up 0.1% at 694.03.

At the UK equities close, Brent oil was priced at USD55.92 a barrel, reversing an earlier gain to USD58.01, though still well clear of the USD50 mark. The US Energy Information Administration said Wednesday that US crude oil stocks rose by 6.3 million barrels to 413.1 million barrels in the week ended January 30, up 1.6% on the week and 15% year on year.

"As declines set in, Brent crude had managed to remain above USD56 per barrel after investors were unwilling to push the commodity’s levels any higher," said Spreadex analyst Connor Campbell. "However, Brent shot down to USD55 per barrel as the latest high US crude oil figure saw an increase of 6.3 million barrels, following 8.9 and 10.1 million in the last two weeks."

In the FTSE 100, Tullow Oil ended down 5.2%, BP down 1.6%, Royal Dutch Shell 'B' down 1.8% and 'A' down 1.1%, and BG Group down 1.4%, all among the index's worst performers.

In the FTSE 250, Afren fell 6.3%, Premier Oil 5.8%, Hunting 4.7%, John Wood Group 3.7%, Petrofac 2.2%, and Ophir Energy 2.1%.

The UK service sector began the year strongly, according to the Markit Services Purchasing Managers' Index. The index for January came in at 57.2, ahead of the 56.3 reading expected by economists and the 55.8 level in December.

The pound rose following the PMI data and was quoted at the UK equities close at USD1.5206.

Meanwhile, the eurozone private sector was reported to have expanded in January at the fastest pace since July last year as output expanded in Germany, Italy and Spain. But the downturn in the French economy extended into its ninth month. The final eurozone composite output index rose to 52.6 in January from 51.4 in December. It also improved upon the flash reading of 52.2.

European stocks closed mixed, with the CAC 40 in Paris down 0.4%, and the DAX 30 in Frankfurt up 0.2%.

The focus in Europe remained on Greece as Finance Minister Yanis Varoufakis continued his tour of European capitals to drum up support for changes to the country's debt programme.

"Germany said it is completely unwilling to tolerate a debt haircut, and is seeking a comment from Greece stating it will drop its pre-election promises. Greek Finance Minister Varoufakis is having a tougher time winning allies, not a great sign ahead of his meeting with staunch debt-cut opposition Wolfgang Schauble tomorrow," Spreadex's Campbell said.

Varoufakis said he would meet German Finance Minister Wolfgang Schaeuble on Thursday - correcting impressions that his tour of capitals was going to skip Berlin in an apparent snub to Europe's paymaster.

In the US, data showed that private sector jobs growth in the US fell short of expectations in January. Report released by payroll processor ADP showed that private sector employment increased by 213,000 jobs in January following an upwardly revised increase of 253,000 jobs in December.

The US non-manufacturing ISM purchase managers' index remained flat in January at 56.7, slightly above 56.3 economists forecasts, and also above the previous reading of 56.2 in December.

"The ISM report suggested that the US economy is heading in the right direction, but that there are concerns over the country’s job figures. Its unemployment claims tomorrow will give a better indication of this trend ahead of the all-important non-farm data on Friday," Campbell said.

The US reports initial and continuing jobless claim at 1330 GMT on Thursday, followed by non-farm payrolls at the same time on Friday.

The US service sector growth remained solid in January, according to a report from Markit on Wednesday. The services PMI index for January came in at 54.2, slightly above the flash reading of 54.0. The composite index also improved upon the flash reading at 54.4 versus 54.2.

At the London equities close, Wall Street was trading flat to higher. The DJIA was up 0.4%, while the S&P 500 was flat and the Nasdaq Composite was up 0.1%.

In China, the People's Bank of China reduced the reserve requirement ratio of banks by 0.5 percentage point to 19.5% with effect from February 5. This gave London's mining stocks a small boost during the morning, with Fresnillo closing up 0.9%.

ARM Holdings closed up 3.1% as the best performer in FTSE 100. The chip designer announced Tuesday a new suite of intellectual properties that are expected to be launched on mobile devices in 2016, including its ARM Cortex-A72 processor. The group said that in target configurations, the new processor well deliver CPU performance that is 50 times that of leading smartphones from five years ago.

In addition, Sony, one of ARM's main customers, raised its guidance for its full year, forecasting a smaller than initially expected loss. The Japanese company's provisional results showed stronger than expected revenue growth.

Also in the FTSE 100, Sky ended up 1.3%. The broadcaster posted a big increase in pretax profit for the first half of its financial year, boosted by a rise in revenue and exceptional gains from the sale of its stakes in ITV, which was the best FTSE 100 performer, up 2.9%, and the National Geographic Channel.

In its first results incorporating its acquisitions of Sky Italia and a majority stake in Sky Deutschland, Sky posted a pretax profit of GBP1.21 billion for the half year to end-December, compared with GBP507 million a year before, as revenue rose to GBP4.30 billion from GBP3.67 billion.

GlaxoSmithKline also ended among the best blue-chip performers, up 1.6%. The company reported a drop in pretax profit for 2014, hit by lower revenue for asthma and chronic obstructive pulmonary disease treatment Advair, and said that it was continuing to evaluate the possibility of an initial public offering for a minority stake in its HIV joint venture ViiV Healthcare.

The company sweetened the news for shareholders by raising its total dividend to 80 pence from 78 pence a year before, pledging to maintain this dividend level for 2015, and reiterating plans to return GBP4 billion of net proceeds from its transaction with Novartis to shareholders in 2015.

Also connected to the Novartis deal, Glaxo said separately near the close of trading that it is selling its 7.9% stake in Danish biotechnology company Genmab A/S via a share placing. GlaxoSmithKline currently holds 4.47 million shares in Copenhagen-listed Genmab. The stock closed Wednesday at DKK471.00, making Glaxo's stake worth DKK2.11 billion or GBP212.4 million.

Hargreaves Lansdown, down 8.5%, finished as the worst performer in the FTSE 100. The investment management product provider reported a drop in first-half pretax profit despite a rise in assets under administration over the course of the six months, in what was described as a "muted" time for stocks and retail investors.

In the economic calendar Thursday, German factory orders are due at 0700 GMT, followed by Bank Of England interest rate decision at 1200 GMT.

In the corporate calendar, Vodafone Group will provide an interim management statement, as will as Compass Group and Enterprise Inns. AstraZeneca and Smith & Nephew will release full-year results, and easyJet will publish its January Traffic Statistics.

By Daniel Ruiz; danielruiz@alliancenews.com

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