LONDON (Alliance News) - Stocks in London were lower ahead of the Bank of England's 'Super Thursday', as stocks going ex-dividend weighed on the FTSE 100, but with paper and packaging firm Mondi leading just six blue-chip gainers after a positive trading update.
The FTSE 100 was down 1.0%, or 60.49 points, at 6,102.00. The FTSE 250 was down 0.5% at 16,635.52 and the AIM All-Share down 0.1% at 726.33.
Supermarket chain J Sainsbury, down 3.6% and British Gas owner Centrica, down 3.5%, were the worst performers in the FTSE 100, after going ex-dividend, meaning new buyers no longer qualify for the latest dividend payment. Also in the red after going ex-dividend were Wm Morrison Supermarkets, Inmarsat, GlaxoSmithKline and Admiral Group.
Shares in Mondi were up 2.3%. The Anglo-South African company said underlying operating profit grew in the first quarter as strong contributions from some divisions offset lower selling prices in others. Mondi said underlying operating profit for the quarter to the end of March was EUR269.0 million, 14% higher than the EUR236.0 million it made a year earlier.
Consumer Packaging, Uncoated Fine Paper and the group's South African arm all made strong contributions in the quarter, Mondi said, offsetting lower selling prices in some Packaging Paper segments and margin pressures on its Fibre Packaging business.
ITV was initially among the FTSE 100 gainers but has since reversed to be down 0.2%. The broadcaster said it has made a good start to 2016, with revenue up 14% in its first quarter, helped by a strong performance in its ITV Studios and online, pay and interactive segment.
In a statement ahead of its annual general meeting, ITV said total revenue rose 14% to GBP755 million in the three months to the end of March from GBP665 million a year before. This included flat net advertising revenue, 44% growth in the ITV Studios segment and 17% growth in its online, pay and interactive segment.
ITV's share of viewing was up 3%, including a 1% rise in share of viewing for its core family of channels. The company expects to deliver "good group profit growth" in the first half, against a backdrop of uncertainty in the UK advertising market which it has experienced "since the debate over Brexit began", it said.
Gold miners were gaining. Randgold Resources was up 1.3% and Fresnillo up 1.2% after Goldman Sachs raised both company's price targets, keeping a Neutral stance on Randgold and a Sell recommendation on Fresnillo. The gold price was recovering some lost ground since Monday, when it fell to a low of USD1,261.20 an ounce. The precious metal rose Tuesday and Wednesday, quoted at USD1,271.27 soon after the London equities open on Thursday.
In the FTSE 250, SuperGroup was the biggest mid-cap gainer, up 12%, after posting growth in total and like-for-like revenue for the financial year to April 23, with a particularly strong performance in the fourth quarter, as one of its founders stepped down to lead a design consultancy.
The fashion retailer, owner of the Superdry brand, said total group revenue for the year to April 23 was GBP589.5 million, up 21% year-on-year from GBP486.6 million. Total retail revenue grew 25% over the year to GBP416.1 million from GBP334.1 million. Like-for-like sales growth, meanwhile, hit 11.3%, well ahead of the 4.8% like-for-like growth posted for the prior financial year. Like-for-like sales growth in the fourth quarter was even stronger, at 15%.
Aldermore Group was up 5.0% after saying loan origination surged year-on-year in the first quarter and said it remains confident on meeting its guidance for 2016. The bank, which lends to small businesses, homeowners and landlords, said loan origination grew 43% year-on-year in the quarter to the end of March to GBP814.0 million from GBP568.0 million.
In Paris, the CAC 40 was down 0.6% and the DAX 30 in Frankfurt was down 0.7%.
In Asia on Thursday, the Japanese Nikkei 225 index ended up 0.4%. In China, the Shanghai Composite finished flat, while the Hang Seng index in Hong Kong is down 0.8%.
The BoE interest rate decision, the minutes of the rate-setting Monetary Policy Committee meeting and the Inflation Report will be all released at noon, followed by a press conference by Governor Mark Carney scheduled for 1230 BST on what has been dubbed "Super Thursday".
"The governor of the Bank of England is probably going to be treading on eggshells today ? and I don't envy him that," said Commerzbank analyst Antje Praefcke. "Everything is likely to revolve around a Brexit ? a subject Carney understandably wants to say as little about as possible".
Praefcke noted that Carney risks fuelling considerable uncertainty on the market, sending the pound "on a nose dive". The analyst said the market will be "fishing" for any reference Carney might give as to the BoE's view on the risk of a Brexit and whether it is preparing for it.
The minutes of the April meeting showed that MPC members thought about the likely implications for monetary policy of a vote to leave the EU.
"Such a vote might result in an extended period of uncertainty about the economic outlook, including about the prospects for export growth," those minutes had said. "This uncertainty would be likely to push down on demand in the short run."
Commerzbank's Praefcke said the focus will be on the Inflation Report, with investors looking out as to whether the UK growth forecasts will be cut, "but above all how the BoE weighs the risks and whether they are going to be significantly biased to the downside".
Analysts widely expect the BoE to keep UK interest rates at a record low of 0.5% and its QE programme spending unchanged at GBP375 billion.
On the economic front and beyond the Bank of England on Thursday, eurozone inflation data are set for 1000 BST, along with eurozone industrial production. In the US, import and export data are due at 1330 BST, alongside initial and continuing jobless claims.
By Daniel Ruiz; danielruiz@alliancenews.com
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