LONDON (Alliance News) - London-listed stocks ended mixed after spending most of Wednesday flatlining, before a slide in oil prices caused them to dip as data from the US Energy Information Administration showed another build up of its crude oil stockpiles.
The EIA said its commercial crude oil inventories increased by 9.4 million barrels in the week ending March 18, more than triple economists' expectations for an increase of 3.09 million. The report said at 532.5 million barrels, US crude oil inventories are at historically high levels at this time of year.
The further evidence of excess supply of the commodity sent oil prices lower, with US benchmark West Texas Intermediate hitting an intraday low of USD40.04 a barrel after the data.
Brent oil touched a low of USD40.59 a barrel, and at the London stock market close was quoted at USD40.71 a barrel. This was lower than the USD41.60 seen at the close on Tuesday.
The FTSE 100 ended up 0.1%, or 6.37 points, at 6,199.11, the FTSE 250 closed down 0.2%, or 39.29 points, to 16,864.64 while the AIM All-Share up 0.2%, or 1.29 points, to 710.33.
European stocks were mixed, the CAC 40 in Paris ended down 0.2%, while the DAX 30 in Frankfurt ended up 0.3%.
On Wall Street at the London close, the Dow 30 was down 0.1%, the S&P 500 down 0.3% and the Nasdaq Composite down 0.7%.
On the US economic front, the Commerce Department released a report showing a rebound in new home sales in February. The report said new home sales rose 2.0% to an annual rate of 512,000 in February after tumbling 7.0% to a revised rate of 502,000 in January. Economists had expected new home sales to climb 3.2%.
At the closing bell on European equity market the pound traded the dollar at USD1.4092 versus USD1.4208 on Tuesday. The euro was quoted at USD1.1164 against USD1.1209 on Tuesday.
Individual stock news proved the main focus during the day's trading. Shares in food producer Premier Foods jumped after it disclosed two takeover approaches had been made by US spices and herbs manufacturer McCormick & Co, though both were rebuffed.
Premier also said it has signed a cooperation agreement with Japanese noodle maker Nissin Foods Holdings Co Ltd and affirmed its expectations for the full year.
Shares in Premier Foods, which makes Bisto gravy and Mr Kipling cakes, closed up 57% at 49.35 pence, the best performer in the FTSE All-Share by some distance. At this price, Premier Foods has a market capitalisation of GBP407.92 million.
The company said Baltimore, Maryland-based McCormick made a highly conditional approach at an indicative price of 52 pence per Premier share in cash in February. Premier rejected that bid on the basis it "significantly undervalued" the group and its prospects. That first bid valued London-listed company at around GBP429.4 million.
McCormick then returned with a second offer of 60p per share in cash, which Premier rejected for the same reasons, adding it did not think the proposal tabled by McCormick would be in the best interests of the company or its shareholders. The second bid valued Premier at GBP495.5 million.
Kingfisher closed as the best performer in the FTSE 100, up 5.9%, as the DIY retailer reported adjusted pretax profit which beat expectations in its recently-ended financial year, and said it is making good progress with its five-year turnaround plan.
In the year ended January 31, Kingfisher's adjusted pretax profit rose to GBP686 million from GBP684 million the year before, beating the analyst consensus figure of GBP667 million. Adjusted pretax profit strips out the impact of exceptional items.
Statutory pretax profit, however, dropped to GBP512 million from GBP644 million due to exceptional costs of GBP166 million relating to the company's restructuring efforts.
The company, which operates under the B&Q and Screwfix brands in the UK & Ireland, Castorama and Brico Depot in Europe, and Koctas in Turkey, said it is on track with its five-year transformation plan, which aims to deliver a GBP500 million profit uplift by the end of the fifth year.
Gold miners were among the losers on Wednesday. At the London equities close, the price of gold was quoted at USD1,221.50 an ounce, versus USD1,250.44 at the same point on Tuesday. The precious metal had risen in the wake of the terrorist attacks in Brussels. On Wednesday, investors pulled out of the safe haven asset, pushing Fresnillo down 3.6% and Randgold Resources down 2.2%, having been among the best performers in the FTSE 100 on Tuesday.
In the FTSE 250, bookmaker William Hill said a weaker-than-expected online performance in the year so far, means its 2016 profit will be below expectations.
In the period to March 20, the company said its online business had been hit by regulation and adverse sporting results. William Hill saw gross win margins in online fall below expectations for the period to 1.9 percentage points, as a result of unfavourable European football results and the "worst Cheltenham results in recent history".
From a regulatory perspective, the level of active players has decreased due to an acceleration in the number of time-outs and automatic self-exclusions. If this trend persists, lower revenue will reduce online's profit by between GBP20 million and GBP25 million in 2016.
Time-outs are a similar feature which came into force at the end of 2015. These allow punters to limit the amount of time they spend on a betting site in a single session or day and are mainly used for games, slots and casino.
Taking the disappointing online performance into account, the bookmaker said overall group operating profit for 2016 is now expected to be in the range of GBP260 million to GBP280 million, down from GBP291.4 million in 2015.
The stock closed as the worst performer in the FTSE 250, down 11%, weighing on peers in the process. Ladbrokes ended down 2.6%, while Paddy Power Betfair recovered some of its losses to close down 0.4%.
In the economic calendar for Thursday, the German consumer confidence survey is at 0700 GMT, before the European Central Bank's monthly economic bulletin at 0900 GMT and UK retail sales and mortgage approvals both at 0930 GMT. Later in the day is US continuing and initial jobless claims and durable goods data at 1230 GMT, the Kansas Federal Reserve's manufacturing activity at 1500 GMT and the Baker Hughes US oil rig count at 1700 GMT.
The focus in the UK corporate calendar will be on full-year results from fashion retailer Next and a trading statement from energy company SSE. QinetiQ Group publishes a pre-close trading statement ahead of its financial year end on March 31.
Land and property investor and construction company Henry Boot, infrastructure investor International Public Private Partnerships, ceramic product manufacturer and distributor Churchill China and F&C Private Equity Trust all report full-year results as well.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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31 Oct 2016 09:39
