LONDON (Alliance News) - London stock indices opened sharply lower Wednesday, resuming its run of losses after Tuesday's pull-back after a lower close on Wall Street fed into Europe.
The FTSE 100 traded down 1.9% at 5,964.87 with only two stocks trading higher, the FTSE 250 was down 1.6% at 16,457.80, and the AIM All-Share was down 0.3% at 715.08.
European stocks also were down at the open, with the CAC 40 in Paris off 1.9% and the DAX 30 in Frankfurt down 1.7%.
New York stocks gave up early gains on Tuesday, with the DJIA closing down 1.3%, the S&P 500 ending down 1.4% and the Nasdaq Composite down 0.4%. Stock had initially after the People's Bank of China cut its key interest rates and reserve ratio in an effort to stem heavy losses in its stock market and support its slowing economy.
Asian equities were fluctuating between gains and losses Wednesday as investors react to the new stimulus measures in China. The Japanese Nikkei index closed up 3.2%, ending a run of six consecutive days of losses, the Hang Seng was down 0.7% and the Shanghai Composite was down 1.3%.
On the London Stock Exchange, miners were back amongst the worst performers in the FTSE 100 after Tuesday's strong gains. Glencore was the worst performer down 3.9%, while Anglo American was down 3.8%, and Antofagasta was down 3.6%.
Despite posting strong results, even WPP was unable to escape the fallers list and traded down 1.4%. The media buying giant reported a sharp rise in pretax profit for its first half, boosted by exceptional gains and an improved operating performance, and reiterated guidance of net sales growth of over 3% for 2015. WPP proposed a dividend of 15.91 pence, up 37% from 11.62 pence a year before.
The company reported pretax profit of GBP710 million for the half year to end-June, up 45% from GBP491 million a year before, boosted by exceptional gains on the sale and revaluation of some of the company's associates and investments. On a headline basis, pretax profit rose GBP596 million, up 12% from GBP532 million.
Shares in Paddy Power and Betfair Group surged after the companies reached an agreement in principle to merge in an all-share deal.
Under the terms of the merger, Paddy Power shareholders would own 52% of the combined company, with the remaining 48% owned by Betfair shareholders. Immediately prior to completion of the deal, Paddy Power's shareholders would get an EUR80 million special dividend.
Paddy Power was up 15%, while Betfair was up 19%. Meanwhile, rivals Ladbrokes, down 5.1%, and William Hill, down 3.3%, were amongst the worst midcap performers.
OneSavings Bank reported an 88% surge in profit in the first half, driven up by higher-margin new lending and lower costs of funding. The specialist lender, which offers residential, buy-to-let and commercial mortgages, secured loans and development finance, said pretax profit increased to GBP46.6 million in the six months ended June 30, compared with GBP24.8 million in the corresponding half the prior year.
OneSavings, which listed on the London Stock Exchange in June 2014, said it will pay a 2.0 pence per share interim dividend. The shares traded up 3.3%.
HSS Hire Group shares were down 36%, the worst FTSE All Share performer, after it said it anticipates its full-year earnings will come in below market expectations following continued soft trading in the second half so far, compounding the widened pretax loss the group posted for the first half.
The tool and equipment hire company said its pretax loss for the half year to June 27 was GBP14.1 million, widened from the GBP11.1 million, even as lower financing costs in the half helped to mitigate some of the decline. The group said its adjusted earnings before interest, taxation, depreciation and amortisation were flat a GBP28.9 million in the half, dragged back by costs related to its February float in London and branch start-up costs.
In the economic calendar, British Bankers' Association mortgage approvals are due at 0930 BST and Confederation of British Industry distributive trades survey results at 1100 BST. Later in the day, there are US Mortgage Bankers Association mortgage approvals at 1200 BST, before US durable goods orders at 1330 BST and Energy Information Administration crude oil stocks at 1530 BST.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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