LONDON (Alliance News) - London stocks closed broadly flat on Wednesday ahead of the Bank of England rate decision due on Thursday, as gains made by miners wiped out fallers including travel operator TUI and data and analytics company Experian.
Eyes will now turn to the Bank of England's rate decision and inflation report on Thursday, due at 1200 BST and to be followed by a press conference with Governor Mark Carney at 1230 BST. Analysts expect the Bank to hold rates at current levels but to trim expectations for UK growth as uncertainty ahead of the UK's referendum on its European Union membership mounts.
The inflation report from the Bank will be the last issued before the referendum takes place on June 23.
On Wednesday, the National Institute of Economic & Social Research, a UK think tank, claimed sterling could lose a fifth of its value in the event of a Brexit, triggering intense inflation pressure and slower economic growth.
The FTSE 100 closed up 0.1% or 5.84 points at 6,162.49, while the FTSE 250 closed down 3.67 points, at 16,720.75.
TUI, the world's largest travel operator, fell 1.7% as it echoed warnings already given by airlines of the hit it has taken from reduced demand for travel to North Africa, Turkey and Belgium in the wake of a slew of recent terror attacks.
TUI, owner of the Thomson and First Choice brands, said trading for the summer season remains on track but it has seen subdued demand in the key destination of Turkey. Shore Capital analyst Greg Johnson said while "obvious concerns remain over the ability to cover the shortfall of demand to Turkey", the "current trading backdrop, interim performance and outlook are encouraging".
Data and information services firm Experian, meanwhile, fell 0.4%, recovering somewhat over the course of trading, despite the group hiking its dividend, posting an increased annual pretax profit and saying it expects to buy back USD400.0 million worth of shares in the current financial year.
Pretax profit rose to USD1.03 billion in the financial year ended March 31, from USD1.01 billion a year earlier, on revenue from continuing activities of USD4.47 billion, with both total and organic revenue at constant exchange rates up 5%. At actual exchange rates, total revenue from continuing activities fell by 4% due to foreign exchange headwinds during the period.
But the fallers in the blue-chip index were offset by a good day for the mining sector, which dominated the biggest gainers. Anglo American, up 4.2%, Randgold Resources, up 3.5%, BHP Billiton, up 2.2%, Fresnillo and Glencore, both up 2.0%, Antofagasta, up 1.7% and Rio Tinto, up 1.5%, all closed the day among the best performers. Gold miner Centamin, up 7.2%, led the FTSE 250 gainers.
The FTSE 350 mining sector closed the day up 2.6%, adding to the 1.8% gain made on Tuesday, as miners continued to recover losses made on Monday when the sector was hit by weak trade data from China. Gold was trading at USD1,272.84 per ounce at the close in London, up from USD1,259.09 at the close on Tuesday, further helping the sector.
"The re-emergence of gold has brought about significant upside for some of the major players today," said Joshua Mahony, market analyst at IG.
Oil was trading at USD47.065 at the London equities close, significantly up from USD44.985 on Tuesday. The rise was driven by US Department of Energy figures which showed crude stockpiles fell last week, having been anticipated to rise. Fawad Razaqzada, technical analyst at City Index, said the drawdown may be attributable to the wildfire which hit Alberta given Canada's main export market is the US.
The rise in the oil price sent Tullow Oil shares up 4.8%, Cairn Energy up 3.0% and, in the FTSE All-Share, EnQuest up 6.9%.
In the FTSE 250, engineer Renishaw rose 4.8% after it said it remains on track to meet guidance for the full year as revenue and profit both declined in its first nine months. It said revenue in the first nine months of the financial year ending June 30 dropped to GBP308.1 million from GBP369.7 million the corresponding period a year earlier, dragging the company's pretax profit down to GBP46.3 million from GBP109.8 million.
Despite the decreases, Renishaw, which makes a range of precision measurement, 3D laser scanning and healthcare products, said it still expects to deliver full-year revenue in the range of GBP420.0 to GBP440.0 million and a pretax profit of GBP67.0 to GBP83.0 million. In financial 2015, Renishaw's statutory pretax profit was GBP144.2 million on revenue of GBP494.7 million.
Joining Renishaw among the risers was Savills, the property adviser, up 2.1%, which also affirmed its expectations for the full year despite the upcoming referendum on the UK's membership of the European Union and the US presidential elections hitting demand levels.
Savills said it maintained a strong market share in the prime UK investment and leasing market in the first months of 2016 and said its UK prime residential division performed ahead of expectations amid a rush amongst buyers to beat the stamp duty levy imposed on buy-to-let and second home buyers on April 1.
Leading the mid-cap fallers was William Hill, the bookmaker, which closed down 6.1%. The company said net revenue fell 3.0% in the 17 weeks to April 26 year-on-year, though it said trading was in line with its full-year operating profit guidance.
The group said gross win margins were hit by unfavourable European football results and a "disappointing" Cheltenham horseracing festival. Cheltenham has already been cited by William Hill rivals Ladbrokes and Paddy Power Betfair as the worst in living memory as three of the four favourites in the festival's big races came in first.
The AIM All-Share closed up 0.4%, or 2.95 points, at 726.97.
MX Oil closed among the biggest fallers, down 35% after it said none of the assets it holds in Mexico which had been set to form the basis for the company are worth progressing. This prompted it to consider cancelling a deal to sell its interest in the Aje field in Nigeria.
Joining MX was Atlas African Industries, also down 35%, after it disclosed the Ethiopian Revenue & Customs Authority has removed USD2.4 million from the bank account of Atlas's TEAP Glass PLC subsidiary. Atlas said initial feedback indicates the "unilateral removal of these funds was unlawful and was in breach of an agreement reached with ERCA" and said it will seek to recover the funds.
On the economic front, data from the Office for National Statistics showed UK industrial production grew 0.3% month-on-month in March, slower than the 0.5% rise forecast by economists. In February, the industrial output declined 0.2%. Similarly, manufacturing output gained 0.1%, in contrast to a 0.9% decline in February. Economists had forecast a 0.3% increase.
On a yearly basis, both industrial and manufacturing output contracted in March. Industrial output slid 0.2%, offsetting the 0.1% increase in February but slower than the expected 0.4% decrease. Year-on-year, manufacturing production fell 1.9%, in line with consensus, following a 1.8% decline in February.
The pound was trading at USD1.4473, compared to USD1.4457 at the London close on Tuesday. The euro was trading at USD1.1438, up against USD1.1389 at the previous close.
In France, the CAC 40 closed the day down 0.5%, while the DAX in Germany closed down 0.7%.
At the London close, the Dow Jones Industrial Average was down 0.7%, the S&P 500 down 0.4% and the NASDAQ Composite down 0.3%.
On the economic front and beyond the Bank of England on Thursday, CPI data is due from France at 0745 BST, while Eurozone CPI is due at 1000 BST along with Eurozone industrial production data. Irish CPI will follow at 1100 BST before eyes turn to the US, which is due to publish import and export data at 1330 BST.
Thursday promises to be busy on the corporate front. Broadcaster ITV publishes a trading update, as does Anglo-South African packaging company Mondi, fashion retailer SuperGroup, building materials firm SIG, construction and housebuilding company Galliford Try, generic drugmaker Hikma Pharmaceuticals, and casino and bingo firm Rank Group.
Telecoms group TalkTalk Telecom Group publishes its annual results, as does miner Vedanta Resources. Trading updates are also due from life insurance consolidate Phoenix Group Holdings, lender Aldermore Group, oil and gas firm Cairn Energy and engineering consultant Ricardo.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
UK dividends calendar - next 7 days
Friday 26 August | |
Aberforth Smaller Companies Trust PLC | dividend payment date |
abrdn Property Income Trust Ltd | dividend payment date |
Alternative Income REIT PLC | dividend payment date |
Aptitude Software Group PLC | dividend payment date |
Atrato Onsite Energy PLC | dividend payment date |
BlackRock Throgmorton Trust PLC | dividend payment date |
Bloomsbury Publishing PLC | dividend payment date |
CQS Natural Resources Growth & Income PLC | dividend payment date |
CQS New City High Yield Fund Ltd | dividend payment date |
Dunedin Income Growth Investment Trust PLC | dividend payment date |
Gore Street Energy Storage Fund PLC | dividend payment date |
Greencoat Renewables PLC | dividend payment date |
Greencoat UK Wind PLC | dividend payment date |
Henderson Far East Income Ltd | dividend payment date |
Impax Environmental Markets PLC | dividend payment date |
International Biotechnology Trust PLC | dividend payment date |
M&G Credit Income Investment Trust PLC | dividend payment date |
Mediclinic International PLC | dividend payment date |
Octopus Renewables Infrastructure Trust PLC | dividend payment date |
Porvair PLC | dividend payment date |
PRS REIT PLC | dividend payment date |
Quixant PLC | dividend payment date |
Schroder Oriental Income Fund Ltd | dividend payment date |
Starwood European Real Estate Finance Ltd | dividend payment date |
Target Healthcare REIT PLC | dividend payment date |
Volex PLC | dividend payment date |
Monday 29 August | |
Ecofin US Renewables Infrastructure Trust PLC | dividend payment date |
Tuesday 30 August | |
JPMorgan Global Core Real Assets Ltd | dividend payment date |
Scottish Investment Trust PLC | dividend payment date |
Wednesday 31 August | |
AEW UK REIT PLC | dividend payment date |
Anglo Pacific Group PLC | dividend payment date |
Bankers Investment Trust PLC | dividend payment date |
City of London Investment Trust PLC | dividend payment date |
Custodian REIT PLC | dividend payment date |
Ecofin Global Utilities & Infrastructure Trust PLC | dividend payment date |
Henderson International Income Trust PLC | dividend payment date |
Jupiter Fund Management PLC | dividend payment date |
Picton Property Income Ltd | dividend payment date |
Polar Capital Global Financials Trust PLC | dividend payment date |
Polar Capital Global Healthcare Trust PLC | dividend payment date |
UK Commercial Property REIT Ltd | dividend payment date |
UK Commercial Property REIT Ltd | special dividend date |
Thursday 1 September | |
abrdn Equity Income Trust PLC | ex-dividend date |
Admiral Group PLC | ex-dividend date |
Admiral Group PLC | special dividend date |
Antofagasta PLC | ex-dividend date |
Apax Global Alpha Ltd | ex-dividend date |
BlackRock Income & Growth Investment Trust PLC | dividend payment date |
BlackRock World Mining Trust PLC | ex-dividend date |
Centamin PLC | ex-dividend date |
Clarkson PLC | ex-dividend date |
CT UK Capital & Income Investment Trust PLC | ex-dividend date |
Diversified Energy Co PLC | ex-dividend date |
Downing Renewables & Infrastructure Trust PLC | ex-dividend date |
Genuit Group PLC | ex-dividend date |
Glencore PLC | ex-dividend date |
Hochschild Mining PLC | ex-dividend date |
Inspecs Group PLC | ex-dividend date |
InterContinental Hotels Group PLC | ex-dividend date |
International Personal Finance PLC | ex-dividend date |
Invesco Perpetual UK Smaller Companies Investment Trust PLC | ex-dividend date |
JLEN Environmental Assets Group Ltd | ex-dividend date |
JPMorgan American Investment Trust PLC | ex-dividend date |
JPMorgan China Growth & Income PLC | dividend payment date |
JPMorgan Claverhouse Investment Trust PLC | dividend payment date |
JPMorgan Global Growth & Income PLC | ex-dividend date |
Knights Group Holdings PLC | ex-dividend date |
LondonMetric Property PLC | ex-dividend date |
Me Group International PLC | special dividend date |
Miton UK Microcap Trust PLC | ex-dividend date |
Momentum Multi-Asset Value Trust PLC | ex-dividend date |
PageGroup PLC | ex-dividend date |
PageGroup PLC | special dividend date |
PayPoint PLC | ex-dividend date |
Premier Miton Global Renewables Trust PLC | ex-dividend date |
ProCook Group PLC | ex-dividend date |
Quilter PLC | ex-dividend date |
Redde Northgate PLC | ex-dividend date |
Regional REIT Ltd | ex-dividend date |
RM Infrastructure Income PLC | ex-dividend date |
Robert Walters PLC | ex-dividend date |
Savills PLC | ex-dividend date |
SDCL Energy Efficiency Income Trust PLC | ex-dividend date |
TClarke PLC | ex-dividend date |
UK Commercial Property REIT Ltd | special dividend date |
Unilever PLC | dividend payment date |
Utilico Emerging Markets Trust PLC | ex-dividend date |
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