Marks & Spencer Share News (MKS)

LONDON (Alliance News) - UK shares were outperforming their European counterparts midday Tuesday, with the market's heavyweight oil sector rallying amid more stable oil prices.

The FTSE 100 index traded up 0.6% at 6,071.12 points, the FTSE 250 was up 0.3% at 17,120.85 and the AIM All-Share was down 0.1% at 724.17. In Europe, the French CAC 40 was up 0.2% as was the German DAX 30.

Futures trading pointed the Dow Jones Industrial Average and S&P 500 both up 0.1%, and the Nasdaq 100 was indicated flat.

BG Group, up 2.4%, BP, up 1.9% and Royal Dutch Shell 'A' up 1.9% were amongst the leading gainers in the FTSE 100, as oil prices stabilised after a volatile day on Monday. Brent oil was quoted at USD36.45 a barrel at midday Tuesday, compared to USD36.18 at the close on Monday. The commodity hit a low of USD36.01 on Monday, which was its lowest price since December 2008.

The stability in oil prices come after China's central government said its fiscal policy needs to be more forceful and its monetary policy more flexible to ensure economic growth stays in the proper range in 2016, Chinese news agency Xinhua reported on Monday.

The Chinese government recently cut its annual economic growth target to 6.5% from 7.0%.

Current proactive fiscal policy needs to be more forceful by cutting taxes and raising the fiscal deficit ratio gradually, according to an official statement released by the government after the Central Economic Work Conference.

The statement cited by Xinhua added that monetary policy needs to be more flexible to create appropriate monetary conditions for structural reforms and lower financial costs.

Elsewhere in London, ITV shares were leading the FTSE 100 decliners, down 1.6%, giving up the gains made on Monday after the Mail on Sunday reported that executives from US media giant Comcast were considering a GBP11.0 billion bid for ITV.

However, US entertainment trade magazine Variety has since reported that the US media giant dismissed talk of a bid for the British broadcaster. "We don't comment on M&A rumours but the speculation on ITV is just completely inaccurate," spokesman John Demming told Variety.

Marks & Spencer Group was also one of the worst performers in the index, down 1.5% to 440.90p after Nomura cut its price target to 585.00 pence from 600.00p, after data from Kantar Worldpanel pointed to weak UK clothing sales in November.

Nomura analyst Fraser Ramzan said the weakness was largely driven by milder November weather. The Japanese bank subsequently slashed its forecasts for third quarter general merchandise like-for-like sales for M&S. Nomura also cut its price target on Next, which was down 0.3%.

Hansteen Holdings traded up 1.2% after it acquired a further 31.6 million units in the Ashtenne Industrial Fund from Britel Fund Trustees for GBP15.4 million in cash, equivalent to 0.4869 pence per unit. The price represents an effective 5.0% discount to Hansteen's carrying value for the fund as recorded on June 30.

Meanwhile, the property investment company said AIF has sold 10 properties in individual transactions for a total of GBP20.0 million, equal to a GBP3.0 million over book value recorded on December 31, 2014 and about GBP400,000 over the latest valuation.

Infinity Energy was off 45% after the company said it is no longer in talks to acquire 50% interests in nine UK petroleum exploration and development licenses in South Wales, meaning its shares resumed trading following a period of suspension due to the potential reverse takeover.

The company had been in talks with Eden Energy, with its shares suspended on October 15 under stock exchange rules relating to reverse takeovers.

PipeHawk was one of the best performers in the AIM All-Share index, up 36%. The company's QM Systems subsidiary has been awarded a major contract with Dana UK Axle, a subsidiary of Dana Holding, to deliver a turnkey system for the assembly of vehicle axles at Dana UK Axle's Birmingham facility for over GBP500,000.

The system will involve a number of integrated elements including a press and a robotic weld system, according to PipeHawk, which said the project is due for delivery by the end of the second quarter of 2016.

In economic news, the UK budget deficit widened by more than expected in November, the Office for National Statistics said. Public sector net borrowing excluding public sector banks rose GBP1.3 billion from last year to GBP14.2 billion in November compared to economists' forecast for GBP11.0 billion. In October, the deficit totalled GBP7.4 billion.

In the rest of the economic calendar, the final reading of US third quarter GDP and US personal consumption expenditure prices are both at 1330 GMT.

The consensus according to FXStreet.com is for third-quarter US GDP to show year-on-year growth of 2.1% matching the second estimate, but marking a slowdown from the 3.9% recorded in the second quarter.

US housing price index is at 1355 GMT and existing home sales at 1500 GMT.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

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