LONDON (Alliance News) - European markets suffered on Tuesday from poor manufacturing data in China and weak tech earnings in the US, while London's leading index also was dragged by selling pressure on Premier Inn owner Whitbread and miner Glencore.This was despite well-received first-quarter results from London oil heavyweight BP and from emerging markets bank Standard Chartered.The FTSE 100 was down 13.94 points, or 0.2%, at 7,426.72 Tuesday midday. The FTSE 250 index was down 45.02 points, or 0.2%, at 19,866.18, while the AIM All-Share was up 0.1% at 971.45.The Cboe UK 100 index was down 0.2% at 12,593.46. The Cboe UK 250 was down 0.1% at 17,802.95. The Cboe UK Small Companies was up 0.2% at 11,673.56.In mainland Europe, the CAC 40 was down 0.4% at midday while the DAX 30 was off 0.1%. "It's been a fairly weak start for markets in Europe as investors absorb another set of disappointing economic numbers out of China, and a slowdown in ad sales growth for Google owner Alphabet, with the tech sector slipping sharply," said Michael Hewson, chief market analyst at CMC Markets.Released overnight, data from IHS Markit showed manufacturing output in China slowed in April. The headline seasonally adjusted Caixin Purchasing Managers' Index decreased to 50.2 in April from 50.8 in March. Meanwhile, US Treasury Secretary Steven Mnuchin and a group of trade delegates arrived in Beijing on Tuesday for a new round of trade talks.Prior to his departure, the secretary said both sides were nearing a point at which a deal could be made or the talks would end with no agreement, according to the New York Times.In the US, stocks are pointed to a soft open on Tuesday with both the Dow Jones and S&P 500 seen flat, while the Nasdaq is called down 0.1%.Dragging on the Nasdaq in pre-market trade was Alphabet, shares down 7.4% in after-hours trade after the Google and YouTube parent's first-quarter results disappointed. Alphabet reported first-quarter profit of USD6.66 billion, or USD9.50 per share, compared with profit of USD9.40 billion or USD13.33 per share last year. Revenue for the quarter jumped 17% to USD36.34 billion from USD31.15 billion last year. Analysts had a consensus revenue estimate of USD37.34 billion for the quarter.Before Tuesday's US open are earnings from Cadillac car maker General Motors, payments firm MasterCard, drugmaker Pfizer, and fast food chain McDonald's. After the close are eagerly awaited results from Apple."The main focus apart from [Apple's] sales numbers is how much money it will start spending as it ramps up its services division, as it looks to take on the likes of Netflix, Amazon, as well as Disney," said CMC's Hewson.Weighing in London at midday were Whitbread and Glencore, down 3.5% and 3.4% respectively, sitting at the bottom of the FTSE 100. Hospitality firm Whitbread slipped after reporting a significant fall in annual profit following a more challenging fourth quarter. Whitbread's pretax profit for the 12 months ended February 28 was GBP260 million, down 39% year-on-year, though the figure climbed 1.2% on an underlying basis to GBP438 million. The 39% fall was driven by GBP178 million of extra costs, including GBP108 million related to the sale of Costa Coffee.Whitbread sold off coffee chain Costa last summer for an enterprise value of GBP3.90 billion, leaving it with the Premier Inn hotel chain as well as the Brewers Fayre and Beefeater restaurants. Chief Executive Alison Brittain said softness experienced in the fourth quarter has continued into March and April, but cautioned it is too early to say how this will unfold moving forward. Miner Glencore dipped on a cut to its copper and nickel output guidance for 2019. For the three months ended March, copper production fell 7.2% to 320,700 tonnes from 345,400 tonnes a year prior. Nickel production was down 10% to 27,100 tonnes from 30,100 tonnes a year before. For all of 2019, Glencore cut its guidance for a number of commodities. The firm expects copper production of around 1.46 million tonnes, down 40,000 tonnes from previous forecasts due to "safety and smelter outages" as well as a "range of mine plan updates" at its operations.Its nickel output forecast was cut by 10,000 tonnes to 128,000 tonnes as a result of the "weaker start to the year" from its Koniambo operations on the island of New Calendonia. At the top of the blue-chips was Standard Chartered, up 4.8% as the lender launched a USD1 billion share buyback.For the three months ended March, pretax profit rose 4.2% to USD1.24 billion from USD1.19 billion the year prior. This was despite operating income dipping 1.6% to USD3.81 billion from USD3.87 billion the year before.Standard Chartered made the move to buy back up to USD1.00 billion worth of shares after the resolution of legacy issues - having agreed earlier in April to pay USD1.1 billion in penalties to regulatory authorities in the US and UK relating to historical sanctions compliance and financial crime controls. The buyback will start "imminently" and is expected to reduce the bank's CET1 ratio in the second quarter by around 35 basis points. Oil major BP also gained on a well-received set of first-quarter results, up 1.0%. Replacement cost profit, BP's preferred metric, fell 12% to USD2.10 billion from USD2.39 billion the same period the year before and USD2.72 billion the previous quarter. Production during the quarter averaged 3.8 million barrels a day of oil equivalent, rising 2.4% year-on-year.BP increased its first-quarter dividend by 2.5% on the year before, paying out 10.25 US cents to shareholders."BP has developed a nice habit of beating expectations," said Russ Mould, investment director at AJ Bell. "Every set of quarterly numbers for 2018 came in ahead of forecasts and the first quarter of 2019 is the same.""Sure, profit was lower year-on-year and quarter-on-quarter reflecting the lower oil prices at the start of the period, but its oil and gas trading performance was strong and operationally it managed to keep a lid on production outages," Mould explained.Keeping the FTSE 250 in the red was news of a discounted share placing by Sirius Minerals, dragging the stock 18% lower to 18.00 pence. Sirius Minerals unveiled a major new financing package worth USD3.8 billion for the development of its Woodsmith mine in Yorkshire.The financing represents part two of the financing plan for the polyhalite mine, which will supply fertiliser once up and running, and is made up of four parts.The first is a firm placing, a placing, and open offer worth USD400 million, with shares to be placed at between 15p and 18p per share, launching immediately.Elementis shares also declined, down 8.6%, after the specialty chemicals firm guided its 2019 results will be below expectations following a tough first quarter. The Coatings business was most affected by challenging conditions seen in the first quarter, Elementis said, with weak demand and de-stocking causing revenue to decline compared to the year before, despite improved prices.Still to come in the economic calendar on Tuesday is German consumer price inflation at 1300 BST and US consumer confidence at 1500 BST. Tuesday marks the start of the US Federal Reserve's two-day policy meeting, with the central bank's decision to be announced on Wednesday.
24 Dec 2015 08:40
