Kingfisher Share News (KGF)

LONDON (Alliance News) - London's main stock indices are mixed mid-morning Tuesday, with the FTSE 100 losing its opening gains amid concerns about the Greek debt talks and a weak set of UK current account deficit data.

The FTSE 100 is down 0.5% at 6,856.61, while the FTSE 250 is outperforming, up 0.3% at 17,250.29. The AIM All-Share index is down 0.5% at 716.42.

"The weight of the unstable Greek situation alongside the UK’s own election uncertainty means that it looks like the FTSE is going to have another limited day, even if it does manage to break into some gains as Tuesday continues," said Spreadex analyst Connor Campbell.

Experts from the International Monetary Fund and the EU are studying the reform proposals which Athens has proposed to unlock bailout money. While eurozone officials complained that Greece's plans lack necessary details, Greek Prime Minister Alexis Tsipras argued that he would not submit to creditors unconditionally. Greece will run out of money by April 20 unless it receive bailout funds by then.

"We seek an honest compromise with our partners, but do not expect us to sign an unconditional surrender," Greek Prime Minister Alexis Tsipras told Parliament on Monday.

The UK economy grew more than the prior estimate in the fourth quarter, according to the latest reading released Tuesday. Gross Domestic Product grew 0.6% sequentially in the fourth quarter, revised up from the last reading of 0.5% published in February, the Office for National Statistics said. The growth was therefore unchanged from the 0.6% expansion seen in the third quarter.

Similarly, the annual growth for the fourth quarter was revised up to 3.0%, above the 2.7% figures that economists had expected. The growth rate accelerated from 2.8% in the prior quarter.

Meanwhile, the UK current account deficit for the fourth quarter, which measures the difference between exports and imports of goods and services, came in worse than expected. The deficit narrowed to GBP25.3 billion from a previous reading of a deficit of GBP27.7 billion, but this was still wider that the deficit of GBP21.5 billion that economists had been expecting.

Europe's main indices are also mixed, with the CAC 40 in Paris up 0.1% and the DAX 30 in Frankfurt down 0.3%.

Eurozone inflation remained negative for the fourth consecutive month in March, flash estimate from Eurostat showed Tuesday. The harmonized index of consumer prices fell 0.1% year-on-year in March, in line with expectations. But it was slower than February's 0.3% decline and the 0.6% fall seen in January. The European Central Bank aims to bring inflation towards its target of below, but close to, 2% over the medium term.

Separately, the eurozone's unemployment rate fell to 11.3% from a previous reading of 11.4%, but below economists expectations of 11.2%. Meanwhile, Germany's jobless rate fell to a record low in March, the Federal Labor Agency reported Tuesday. The unemployment rate dropped to a seasonally adjusted 6.4% in March from 6.5% in February, in line with economists' expectations.

Oil prices remain under pressure amid renewed expectations of a nuclear deal with Iran which could see easing of sanctions against Tehran.

Sanctions against Iranian oil may be lifted if Tehran reaches an agreement with the West on some long-anticipated inspections. The deadline for such a deal is supposedly Tuesday. Any easing of sanctions could see a further glut in the already oversupplied market, despite ongoing geopolitical tensions in the Middle East. In the event Iran fails to conclude an agreement with the West, oil prices may likely bounce back once again.

"We could see some form of watered down agreement that would see some sanctions lifted while another deadline may be set in order to make further progress in the future. If these sanctions were oil related, I would expect to see a sharp decline in oil prices but once things settle, the net effect may not actually be that great," says Oanda senior analyst Craig Erlam. "Two things are acting as a barrier to a significant decline, the already low prices and when Iranian oil would begin to flood the market, with many suggesting it could take up to a year."

Brent Oil is down Tuesday mid-morning, trading at USD55.11 a barrel, while West Texas Intermediate is also down at USD47.54 a barrel.

Kingfisher is the best performer in the FTSE 100, up 4.6%, after the DIY retailer reported a drop in sales and profit for its last financial year which it blamed on a slower French market and the strength of sterling, but it said the new CEO plans to organise the company "very differently" to create a unified business that will share IT systems and buying infrastructure.

Chief Executive Véronique Laury, who took the helm from Ian Cheshire in December, said her initial plans include shutting about 60 B&Q stores, unprofitable stores elsewhere in the business, rolling out a new IT platform based on SAP software, as well as putting a new management team in place.

Kingfisher, which owns brands including B&Q, Screwfix, Catorama and Brico Dépôt, reported a pretax profit of GBP644 million for the year to end-January, down 15% from GBP759 million a year earlier, as revenue dropped to GBP10.97 billion from GBP11.13 billion.

It will pay a total dividend of 10 pence for the full year, up from 9.9p the year before, and also sweetened the news by saying it will pay out a further GBP200 million to shareholders via a capital return in the current financial year. It had returned GBP100 million through a special dividend and GBP100 million through a share buyback in the last financial year.

London-listed Antofagasta, trading down 0.1%, and Teck Resources have said they are not in merger talks, responding to a Bloomberg report that said that had been in early-stage talks about creating a mining giant.

The Royal Bank of Scotland Group is down 0.6% after it said Rory Cullinan is to leave his role as the executive chairman of its Corporate and Institutional Bank on April 30, only a month after he was appointed to the role. The Financial Times reported that Cullinan's departure comes after a falling out with fellow executives over how best to pursue the strategy of culling the investment banking operations.

US futures point to a slightly lower opening, with the DJIA, the S&P 500 and the Nasdaq 100 set to open down 0.3%.

By Daniel Ruiz; danielruiz@alliancenews.com

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