LONDON (Alliance News) - UK stocks are mixed Thursday mid-morning, after the UK first-quarter GDP came in unrevised, which was slightly below expectations, while retailers Sports Direct International and Kingfisher leading the blue-chip gainers.
The blue-chip FTSE 100 is flat at 7,034.38, keeping the gains made Wednesday on optimism over a deal between Greece and its European creditors. The mid-cap FTSE 250 is down 0.2%, and the AIM All-Share is up 0.1%.
The second estimate of UK GDP in the first quarter of 2015 grew at a slower pace than the quarter just prior, unrevised, data from the Office for National Statistics showed. The report showed that the UK gross domestic product expanded 0.3% in the first quarter, which was weaker than the 0.6% seen the quarter before. This was the slowest growth since the fourth quarter of 2012. Economists expected a 0.4% rise.
On a yearly basis, GDP growth eased to 2.4% from 3.0% in the previous quarter. Both sequential and annual growth figures came in line with the initial estimate published on April 28.
Following the data release, the pound slipped to USD1.5325, a level it hasn't seen since May 7.
European major indices are giving back some of the gains made Wednesday on the reports from Greece. The CAC 40 in Paris is down 0.4% and the DAX 30 in Frankfurt is down 0.2%.
"The improvement in sentiment on equities and also the euro, whilst also pulling the yields on Greek debt lower, would suggest that the market is increasingly confident that a deal will be struck. Also it would suggest that the reaction will be a strong positive one," says Richard Perry, market analyst at Hantec Markets.
"The fact that there was no retracement in the move, despite the denial of the European Commission that a deal was imminent was also interesting and may well now be supportive for the euro which has come under significant strain in recent days," writes Perry.
Greek Prime Minister Alexis Tsipras said on Wednesday he hopes the country will soon reach a deal with its international creditors over its bailout just days before a looming debt repayment to the IMF.
"We are close to an agreement which will be positive for the Greek economy," Tsipras said after a meeting at the Finance Ministry with the top ministers involved in the negotiations.
However, late Wednesday, Germany rejected Athens' claims that it was close to a deal as the world's top financial officials gathered in Dresden, Germany, for a meeting overshadowed by the Greek debt crisis. Members of the German delegation for the meeting of the Group of Seven (G7) finance ministers and central bankers said: "We have not advanced much further on the matter."
The euro retains the gains made Wednesday and currently trades at USD1,0940.
Miners are weighting on the FTSE 100 following some downbeat comments about the Chinese economy by The People's Bank of China, which on Wednesday warned of deflationary pressure on the country's economy, as it forecast consumer prices will remain subdued for the year and said the growth outlook appears challenging. In Hong Kong, the Hang Seng index ended down 2.2%.
Anglo American, down 1.7%, Glencore, down 1.3%, and Rio Tinto, down 0.7%, are amongst the worst performers in the FTSE 100.
Sports Direct International, up 4.8%, is the best performer in the blue-chip index. The sporting goods retailer said it will provide an update on its outlook for the financial year to April 26 at its annual conference on Thursday, saying underlying earnings before interest, taxation, depreciation and amortisation will be in line with market expectations, while both underlying pretax profit and earnings per share are set to be ahead.
Kingfisher is up 2.9%. The retailer reported a drop in total revenue in the first quarter of its financial year as it was hit by adverse currency movements, but said it is making good progress with its turnaround plans. It reported total sales of GBP2.59 billion for the 13 weeks to May 2, which is a 4.6% decline on the same period the year before, but would have been an increase of 2.7% had exchange rates remained constant. Like-for-like sales were up 0.8% on a constant currency basis
Paypoint is the best mid-cap performer, up 4.7%. The payments services company reported higher pretax profit in its last financial year, driven by growth in its retail networks, and hiked its dividend on the back of the results. It said it made a GBP49.6 million pretax profit in the year ended March 31, compared with GBP46.0 million in the prior year. Revenue increased by 3.0% to GBP218.5 million due to growth across its retail networks, with margins improving. Paypoint increased its dividend for the year to 38.5 pence from 35.3p.
Infinis Energy, up 4.3%, said it swung to profit from a substantial loss in the last financial year leading the company to significantly raise its dividend, as expected. It said the expansion of its wind farms continues to progress on schedule. The British renewable energy company reported a pretax profit of GBP28.1 million in the year ended March 31, swinging from a GBP29.0 million loss in the last financial year, on the back of lower administrative and finance costs, as revenue dipped to GBP236.0 million from GBP238.4 million. It raised its dividend for the full year to 18.3 pence per share compared to only 6.6p last year.
Tate and Lyle is down 4.3% after it reported a huge drop in profit in its recently-ended financial year after suffering from issues with its supply chain, a weak performance from its bulk ingredients business, and tough market conditions for its SPLENDA Sucralose product. Still, Tate & Lyle said it will increase its dividend for the full year to 28.0 pence from 27.6p, an increase of 1.4%.
The sugar and sweeteners company reported a drop in pretax profit in the year to March 31 to GBP51 million from GBP277 million the year before, as sales fell to GBP2.4 billion from GBP2.8 billion.
US futures point to a slightly lower opening, with the DJIA pointed down 0.1%, the S&P 500 seen down 0.1% and the Nasdaq 100 is pointed down 0.1%.
Still in the economic calendar, in the US, jobless claims are due at 1330 BST, while EIA crude oil stocks are at 1600 BST.
By Daniel Ruiz; danielruiz@alliancenews.com
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