SL..L Share News (SL.)

LONDON (Alliance News) - UK stocks fluctuated between gains and losses on Friday, as discussions in Brussels about Britain's future in the European Union kept traders on edge.

At midday, the FTSE 100 traded down 0.7% at 5,933.23 points, the FTSE 250 was down 0.6% at 16,082.19, and the AIM All-Share was up 0.1% at 683.38.

London-listed stocks had enjoyed strong gains in the early part of the week, but the FTSE 100 snapped its run of four consecutive winning sessions on Thursday.

"This inability to keep heading higher is in no small part due to traders’ understanding of how important these Brussels discussions are, and how much they will shape the next six months," said IG market analyst Alastair McCaig.

On Thursday, EU leaders ended their first day of talks without a breakthrough on a British reform deal, leaving Prime Minister David Cameron to haggle about details with top EU officials overnight in the hope of reaching agreement later Friday.

The reforms are intended to convince UK voters they should choose remain in the EU in a referendum that is widely expected to take place this year.

The leaders' initial round of discussion yielded some progress, said EU President Donald Tusk, but adding that "a lot still remains to be done".

Stock markets in Europe also had strugged to find direction early Friday but were heading south by midday. The CAC 40 in Paris was down 0.7% and the DAX 30 in Frankfurt down 0.9%.

Ahead of the open on Wall Street, futures pointed both the Dow Industrials and S&P 500 down 0.2% and the Nasdaq 100 down 0.3%.

UK retail sales grew by more than expected in January, preliminary data from the Office for National Statistics showed.

Retail sales increased 2.3% month-on-month, improving from the 1.0% decline in December. The reading was the fastest increase in retail sales since December 2014 and beat forecasts for a 0.8% rise. On an annual basis, retail sales grew 5.2%, beating economists expectations of 3.6% growth.

Meanwhile, the surplus in the public sector net borrowing excluding banks came in below economists' expectations in January, figures from the ONS showed.

The PSNB ex-banks revealed a surplus of GBP11.2 billion versus GBP10.2 billion a year ago. Economists had forecast GBP12.3 billion surplus. This increase in surplus was largely due to an increase in central government surplus of GBP0.2 billion and a decrease in local government net borrowing of GBP0.6 billion, the agency said.

"Both of these figures were ostensibly good news for both the pound and the FTSE. However, currency and index alike seem to be more focused (arguably for good reason) on David Cameron's attempts at negotiation in Brussels," said Connor Campbell, financial analyst at Spreadex.

In corporate news, Coca-Cola HBC led the gainers in the FTSE 100, up 2.2%, as it beat market expectations, reporting growth in profit in 2015 as volumes increased in all of the markets in which it operates, but revenue continued to be hit by unfavourable movements in foreign exchange rates, as anticipated.

The soft drinks bottling company made a pretax profit of EUR357.1 million in 2015, up from EUR352.0 million in 2014, despite net sales revenue slipping to EUR6.35 billion from EUR6.51 billion.

Shore Capital analyst Phil Carroll said pretax profit came in better than both Shore's and the market's expectations.

Coca-Cola HBC said volume grew 2.6% in the full year, following a 2.8% decline the prior year, as strong underlying trends continued into the fourth quarter, particularly in the sparkling, water and juice categories. Coca-Cola HBC also bottles other still drinks, such as energy and tea drinks.

Standard Life reported higher operating profit before tax in 2015, as stronger fee-based revenue more than offset a fall in spread/risk margin business.

The Edinburgh-based firm, which provides pensions, savings, insurance and investments products, said operating profit before tax from continuing operations amounted to GBP665 million in 2015, up from GBP608 million in 2014, and ahead of analyst forecasts of GBP616 million.

Standard Life lifted its dividend for the year to 18.36 pence per share from 17.03p. Analysts had forecast an annual dividend of 18.32p.

The company's share price gave up early gains in-line with broader market movements and traded down 1.2% at midday.

Shares in Essentra were amongst the biggest gainers in the FTSE 250, up 7.4%. The plastic and fibre products company said its pretax profit dropped in 2015 due to one-off costs, but its revenue rose and it hiked its dividend as its non-oil and gas-exposed business performed well. Essentra also gave a positive outlook for 2016.

Essentra said its pretax profit for the year to the end of December fell to GBP90.4 million from GBP99.7 million, primarily due to one-off write-offs which hit its operating margin. These mostly related to the acquisition of Clondalkin Specialist Packaging and subsequent site rationalisation measures.

Essentra will pay a final dividend of 14.4 pence per share, up from 12.6p a year earlier, pushing its total dividend for the year to 20.7p, up 13%.

Milestone Group said its Nexstar joint venture with Black Cactus Holdings has launched a new music streaming platform called MusicRoo.

The platform has been developed by Black Cactus and will gather music content from a number of suppliers, while allowing users to buy music from its library. The library will be provided under licence from other streaming services, including Deezer and Spotify, and will include more than 35.0 million licensed tracks. Milestone shares more than doubled after the news.

Still ahead in the economic calendar, focus will be on US consumer price index data for January at 1330 GMT. According to FXStreet.com, US CPI is expected to grow 1.3% year-on-year, accelerating from the 0.7% increase seen in December.

Core prices, which excludes volatile products such as food and energy are expected to grow by 2.1% year-on-year, matching the rate seen in December.

"While inflation, as measured by core CPI, is actually already above the Federal Reserve’s 2% inflation target, it is not the central banks' preferred inflation measure – core personal consumption expenditure price index - which is currently some way behind at 1.4%," said Craig Erlam, senior market analyst at Oanda.

Personal consumption expenditure price index is due to be released next Friday.

Aside from US CPI, still ahead this Friday is UK Conference Board leading economic index at 1430 GMT, and eurozone's consumer confidence at 1500 GMT.

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

Copyright 2016 Alliance News Limited. All Rights Reserved.