Spire Healthcare Share News (SPI)

LONDON (Alliance News) - UK stocks ended lower Wednesday, failing to recover from morning losses after Wall Street opened similarly weak, as global equities markets were undermined by renewed concerns about the health of China's economy.

The FTSE 100 index ended down 1.2% at 6,269.61 points, the FTSE 250 closed down 0.5% at 16,811.51 and the AIM All-Share finished down 0.3% at 732.03. In Europe, the DAX 30 index in Frankfurt ended down 1.2%, and the CAC 40 in Paris closed down 0.7%.

Asian stocks also ended in the red, with the Hang Seng index in Hong Kong down 0.7%, the Shanghai Composite down 0.9%, and the Nikkei 225 in Tokyo down 1.9%, reacting to weak Chinese inflation data.

China's National Bureau of Statistics showed consumer inflation eased in September, reflecting a slowdown in food inflation, and producer prices also extended their downward trend, adding to fears of deflationary pressure amid moderation in economic growth.

China's consumer price inflation slowed to 1.6% in September from a 12-month high of 2.0% seen in August. It was forecast to fall to 1.8%, while the Beijing government is aiming for around 3% inflation this year. Month-on-month, consumer prices gained 0.1%, slower than the 0.5% increase seen in August.

"Disinflation of course is not always seen as a bad thing for markets, as it encourages looser-for-longer monetary policy," said IG market analyst Joshua Mahony.

"However, despite expectations that further disinflation in China would spark additional stimulus from the People's Bank of China, the fact is that we have seen precious little economic benefits from the steps already taken, and a drastically falling inflation rate can also be perceived as yet another sign that the Chinese economy is cooling," added Mahony.

Wall Street was lower at the London close, with the Dow Jones Industrial Average down 0.6%, the S&P 500 down 0.3% and the Nasdaq Composite also down 0.3%.

The US earnings season also grabbed the market's attention in New York, with the release of results from financial stocks Wells Fargo and Bank of America and from retailing giant Wal-Mart, owner of UK supermarket chain Asda.

Shares in Wal-Mart fell as much as 10%, erasing almost USD20 billion from its market capitalisation, after the world’s biggest retailer warned investment in e-commerce and wages would hit profits in 2017.

The stock tumbled by the most in more than 15 years after Wal-Mart said in an investor meeting that earnings per share were expected to decline between 6% and 12% in fiscal year 2017.

Wells Fargo's third-quarter profit numbers matched analysts estimates, while it reported a 3% rise in revenue, slightly ahead of analysts expectations. Meanwhile, Bank of America reported a profit for the third quarter, compared to a loss in the same period of last year, as the company incurred significantly lower litigation expenses in the just-concluded period.

Internet streaming media company Netflix and technology company Xilinx are expected to release their quarterly results after the New York market close.

The US Commerce Department released a report showing a modest uptick in US retail sales in September, largely reflecting a jump in auto sales. The report said retail sales edged up by 0.1% in September. However, the figure missed economists expectations of a 0.2% rise. Retail sales in August also were downwardly revised to unchanged compared to the previously reported 0.2% increase.

Excluding the jump in auto sales, retail sales fell by 0.3% in September compared to a 0.1% drop in the previous month. Ex-auto sales had been expected to dip by 0.1%.

The US Labor Department said its producer price index for final demand fell by more than expected, coming in at -0.5% in September after coming in unchanged in August. Economists had expected the index to decline by 0.2%.

The bigger-than-anticipated drop in producer prices was primarily due to a 5.9% decrease in energy prices, which came on the heels of a 3.3% decline in the previous month.

Following the data, the dollar weakened further against the pound, having already been hit by the report that UK unemployment rate dropped to its lowest since 2008 in the three months to August.

Data from the Office for National Statistics showed that the ILO jobless rate fell to 5.4% in three months to August from 5.6% in March to May period. The rate was expected to be at 5.5%. During June to August, the employment rate was 73.6%, the highest since comparable records began in 1971.

Average weekly earnings including bonuses also rose, but by less than the expected 3.1% uplift, gaining 3% in the three months to August.

CMC Markets chief markets analyst Michael Hewson said that the earnings data maintains "the balance between weak price pressures, which could delay a UK interest rate rise by the Bank of England, and strong wage growth, which could still prompt an earlier move by the Monetary Policy Committee."

The pound was at USD1.5442 at the London close, standing at USD1.5282 prior to the UK data.

On the London Stock Exchange, gold miners benefited from a rise in the metal prices, with Randgold Resources ending up 1.7% and Fresnillo up 2.0%. The later reported that gold and silver production both rose in the first nine months of 2015 after the Herradura site in Mexico became operational, and it experienced higher grades and processing volumes, leading it to reiterate its full-year guidance.

Gold price was at USD1,178.05 an ounce at the London close, having touched an intraday low of 1,163.24 an ounce. Meanwhile, Brent oil was at USD48.98 a barrel.

Outside commodities, fund supermarket Hargreaves Lansdown ended at the top of the FTSE 100, up 5.0%, after it reported a positive first quarter in the face of weak markets.

The company reported higher net new business inflows, client numbers and net revenue, though assets under administration were down 11% in a quarter hit by lower stock markets and weakness in investor confidence. Net new business inflows amounted to GBP1.43 billion in the quarter ended September 30, compared with about GBP970 million the corresponding quarter the prior year.

Intertek Group rose 2.6%, after it agreed to buy Professional Service Industries for USD330 million in cash. US-based PSI provides testing and assurance services to commercial and civil construction markets.

Intertek Chief Executive André Lacroix said the acquisition will expand the testing, inspection and certification services company's presence in adjacent US growth markets. The company will finance the acquisition with debt facilities already in place. Net debt will rise to about 1.8 times earnings before interest, tax, depreciation and amortisation at the end of the 2015 fiscal year, it said.

Standard Chartered closed down 1.4% at 728.80 pence. UBS cut its price target on the emerging markets bank to 800p from 1,200p, keeping a Neutral stance, with analysts factoring in a "more comprehensive" balance sheet restructuring.

New Chief Executive Bill Winters is expected to set out his strategy for Standard Chartered before the end of 2015, with UBS calling on him to address the bank's asset quality and to lay out a clear path to higher returns after a tough couple of years. One key question for Winters is whether the bank will raise equity capital in its turnaround effort.

In the FTSE 250, Al Noor Hospitals Group ended as the best performer, up 17%. A deal has been reached on a possible reverse takeover by South Africa's Mediclinic International, which would value Al Noor at around GBP1.36 billion.

The move stands to create an international private healthcare group in Southern Africa, Switzerland and the UAE, as well as having exposure to the UK market through a minority stake in Spire Healthcare Group, whose shares rose 2.7% in London.

Rival bidder and London-listed peer NMC Health, down 1.6%, quickly said however that it remains committed to its offer for Al Noor.

Meanwhile, Domino's Pizza Group closed up 14% at 1,013.38 pence, having earlier touched an all-time high of 1,064p. The takeaway pizza company said it now expects its full-year results to be ahead of expectations following a solid start to the fourth quarter.

In the corporate calendar Thursday, Burberry Group issues a trading statement, Unilever releases third-quarter results, while WH Smith publishes full-year results and Ashmore Group issues a first-quarter trading statement. Virgin Money releases a third-quarter interim management statement, Booker Group publishes half-year results and Game Digital releases full-year results.

Man Group issues a third-quarter interim management statement, Rank Group and Marshalls release interim management statements, and Renishaw issues a first-quarter trading statement.

In the economic calendar, Japan industrial production data are due at 0530 BST. In the US, the consumer price index and initial and continuing jobless claims are both expected at 1330 BST. The Philadelphia Federal Reserve manufacturing survey is due at 1500 BST, while EIA crude oil stocks are due at 1530 BST.

Federal Reserve Bank of St. Louis President James Bullard gives a speech at 1530 BST before the 40th Annual Fall Policy Conference hosted by the Federal Reserve Bank of St. Louis. Meanwhile, at the same time in Washington, the Fed New York President William Dudley participates at an event hosted by the Brookings Institution.

By Daniel Ruiz; danielruiz@alliancenews.com

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