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LONDON (Alliance News) - London equity markets are modestly higher mid-morning Thursday amid a number of individual company updates, while the pound dived against other major currencies following a disappointing set of UK retail sales figures for June.
Data from the Office for National Statistics showed that UK retail sales declined 0.2% from prior month, reversing a 0.3% rise in May. This was the first drop in three months and went against expectations of a 0.4% gain. On a yearly basis, growth in retail sales including automotive fuel eased unexpectedly to 4% from 4.7% in May. Economists had expected 4.8% expansion.
Likewise, sales excluding automotive fuel also dropped 0.2%, while economists had forecast sales to gain 0.4% again as seen in May. On a yearly basis, growth in retail sales including automotive fuel eased unexpectedly to 4% from 4.7% in May. Economists had expected 4.8% expansion.
The pound fell sharply against the dollar to USD1.5582 from USD1.5652 before the data. Against the euro the pound slipped to a low of EUR1.4167.
The FTSE 100 trades up 0.1% at 6,671.18, the FTSE 250 also trades up 0.1% at 17,656.74 and the AIM All-Share index is up 0.3% at 755.36.
In Europe, the French CAC 40 is up 0.2% as is the German DAX 30.
On another busy day on the London stock market, Aberdeen Asset Management is the worst performer in the FTSE 100, trading down 6.4%, having hit its lowest level in over a year. The company said its assets under management dropped in the third quarter of its financial years amid outflows related to volatility in Asian and emerging markets.
Aberdeen said its assets under management fell to GBP307.3 billion at the end of June, down from GBP330.6 billion at the end of March. Aberdeen attributed the fall to market conditions and foreign exchange movements.
Net outflows in the quarter hit GBP9.9 billion, amid institutional investors continuing to reduce their exposure to Asia and emerging markets equities. Aberdeen added it had GBP4 billion in new commitments and mandates awarded but not funded at the end of June.
Unilever shares are up 2.4% after its results beat expectations. The consumer goods group posted underlying sales growth of 2.9% in its first-half, slightly ahead of the consensus for 2.7% growth, while second quarter underlying sales growth, also of 2.9%, beat consensus estimates for 2.6% growth. The underlying figures strip out the impact of currency movements and any acquisitions or disposals.
Shore Capital analyst Darren Shirley highlighted the group's core earnings before interest and taxes margins for the first half, which rose 50 basis points, ahead of Shore's expectation of 30 basis-point increase. On the back of this the analyst sees scope to nudge up forecasts for Unilever.
Unilever also reported a 14% drop in pretax profit to EUR3.6 billion from EUR4.2 billion in the first half, although revenue grew 12% to EUR27 billion from EUR24.1 billion.
Kingfisher trades up 1.4% after it reported a rise in sales on a constant currency basis in the second quarter of its financial year, as it demonstrated growth in each of the regions it operates in and as it continues with its strategy to create a unified 'ONE' Kingfisher.
The FTSE 100-listed DIY retailer, which owns brands including B&Q, Screwfix and Castorama, said that total sales in the 10 weeks to July 11 grew 4.8% on a constant currency basis, while like-for-like revenue rose 3.5%.
SSE is one of the biggest fallers, trading down 4.6% after it said production across most all of its divisions, except coal, rose in the first quarter of the financial year, but it reported a fall in customer accounts and average customer consumption.
The FTSE 100-listed UK energy provider said the number of retail electricity and gas customers at the end of March had fallen to 8.49 million from 8.58 million at the end of March 2014.
ARM Holdings, up 2.8% and Randgold Resources, up 1.7%, are rebounding from recent heavy losses, while Shire trades up 2.7% ahead of its second quarter results at 1200 BST.
In the FTSE 250, Howden Joinery Group is down 4.0%. The kitchens and joinery products manufacturer hiked its interim dividend on the back of a rise in pretax profit and revenue in the first half of 2015.
Howden said its pretax profit in the half to the end of June was up to GBP59.2 million from GBP57.2 million, with growth held back somewhat by higher selling and distribution costs and administrative expenses, as the group continues to invest to expand its operations.
However, N+1 Singer says the results were slightly behind expectations and upgrades of any significance look unlikely.
Greece's Parliament overwhelmingly approved a second set of reforms needed to start talks on a third multi-billion euro bailout in the early hours of Thursday. The reforms, which are the final requirement before the country can start the bailout negotiations with its creditors, included lifting of liquidity of banks, deposit security and renewing of the judicial system. In the 300-seat parliament, 230 lawmakers voted in favour of the bill, with support for the ruling party coming from the pro-euro opposition parties.
In addition, the European Central Bank reportedly provided a new vital cash injection to Greece's liquidity-starved banks on Wednesday, the second such cash injection in just under a week.
Still ahead in the economic calendar is the Confederation of British Industry trade survey results at 1100 BST, US initial and continuing jobless claims at 1330 BST, and the US Conference Board leading indicator at 1500 BST, alongside eurozone consumer confidence.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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