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LONDON (Alliance News) - Stocks in London were lower at the open, with ARM Holdings leading the gainers in the FTSE 100 after the chip-maker reiterated expectations for full-year dollar revenue in line with market expectations.
The FTSE 100 was down 0.5%, or 29.51 points, at 6,375.84 early Wednesday. The blue-chip index touched a new 2016 high of 6,418.25 on Tuesday, a level it hadn't seen since early December.
The FTSE 250 index was down 0.2% at 17,003.31 points, and the AIM All-Shares was up 0.1% at 735.27.
In Europe, the CAC 40 index in Paris was down 0.4% and the DAX 30 in Frankfurt down 0.3%.
ARM Holdings was the best blue-chip performer in London, up 2.2%. The chip maker reiterated expectations for full-year dollar revenue in line with market expectations, as it reported a rise in pretax profit for its first quarter. It said that, at the start of 2016, it has seen its current technology gaining share in target end markets and strong demand for its next generation of products from a wide range of companies.
ARM saw pretax profit rise to GBP112.0 million in the first quarter of 2016, up from GBP103.4 million the year before, as revenue rose 14% to USD398.0 million from USD348.2 million. In sterling, revenue rose 22% to GBP276.4 million from GBP227.5 million.
Shares in builders' merchant Travis Perkins were up 0.6% after Travis said trading met its expectations in the first quarter, with total and like-for-like sales growth proving robust. The group said total sales grew 5.0% in the quarter to the end of March, while like-for-like sales rose 4.2%.
Like-for-like sales in Travis's General Merchanting division rose 4.7% in the quarter, helped by good growth in heavyside categories and timber, while Plumbing & Heating trading settled following a volatile few quarters driven by a restructuring programme in 2015.
Vodafone Group was another gainer, up 0.3%, with shares in the telecommunications giant benefiting from an upgrade by Merrill Lynch to Buy from Neutral.
Meanwhile, peer telecommunications company BT was cut by Jefferies to Hold from Buy, sending its shares down 1.1%. Luxury goods retailer Burberry Group was down 1.7% after being downgraded by Goldman Sachs to Neutral from Buy.
Shares in oil producers were down, with BP falling 1.9% and Royal Dutch Shell 'A' shares down 1.1%. In the FTSE 250, Tullow Oil was off 1.8%.
The Brent oil price retreated after Kuwait oil workers said they will end a strike that disrupted output in OPEC's fourth-largest producer for three days, Bloomberg reported, after the government said it wouldn't negotiate while the walkout lasted.
The North Sea benchmark was at USD42.97 a barrel shortly after the London equities open Wednesday, having stood at USD43.99 a barrel at the close on Tuesday.
"The result of all of this is that oil production is now likely to remain high which could put crude prices under serious pressure once again," said Oanda senior analyst Craig Erlam.
"While there are still possible supply disruptions in Venezuela and Nigeria which could help support prices, yesterday's reports that Russia is looking to increase output and exports after talks collapsed in Doha could spark a market share war, with some other major producers including Saudi Arabia also seeking to raise output," Erlam noted.
Freed from a plan to coordinate output with OPEC members, Russian officials said Tuesday that the country may boost both production and exports. Daily output in 2016 could grow by 100,000 barrels to 10.81 million, Bloomberg said, citing Deputy Energy Minister Kirill Molodtsov.
The US Energy Information Association crude oil stocks are scheduled for 1530 BST.
Elsewhere in the FTSE 250, N Brown Group was the worst mid-cap performer, down 12%. The online and catalogue fashion retailer reported a fall in profit in its recently-ended financial year due to exceptional costs it booked, but revenue rose boosted by a continued strong performance from its three 'power brands'.
N Brown said its pretax profit in the year ended February 27 fell to GBP72.2 million from GBP78.3 million the year before due to GBP17.2 million in exceptional costs it booked in the first half of the year relating to the closure of its clearance stores, reorganisation costs and VAT-related legal and professional fees.
Investors will keep an eye on UK unemployment and average earnings data, due at 0930 BST.
"The UK labour market remains strong. Employment continues to grow but at a declining pace," says Societe Generale analyst Michala Marcussen. "The feature of note for monetary policy is that, even as unemployment continues to fall, earnings growth remains weak".
The French bank expects the UK unemployment rate to fall to 5.0% from 5.1%. However, consensus expectations are for the rate to remain unchanged at 5.1%, according to FXStreet.com.
Average weekly earnings including bonuses are expected to rise 2.3% from the 2.1% growth in March. Excluding bonuses, weekly earnings are expected to remain unchanged at 2.2%.
However, Lloyds Bank economist Hann-Ju Ho expects the data to show underlying wage growth, excluding bonus, to moderate a touch to 2.1%. The analyst forecasts the unemployment rate to stay at 5.1%.
"The fact that wage pressures remain relatively subdued suggests that some slack remains in the labour market," the Lloyds economist said.
Bank of England Governor Mark Carney said Tuesday the central bank has a duty to report on the implications of Brexit to Parliament and to the public.
"Assessing and reporting major risks does not mean becoming involved in politics; rather it would be political to suppress important judgments which relate directly to the Bank's remits and which influence our policy actions," Carney told lawmakers.
"These policy actions include developing, and if necessary implementing, contingency plans," he said. Earlier, Carney said any decision to exit EU would be a major domestic risk to the UK economy. Carney has been criticised for backing the government's bid to maintain the nation in the EU.
In Asia on Wednesday, the Japanese Nikkei 225 index ended up 0.2%. In China, the Shanghai Composite closed down 2.3%, while the Hang Seng index in Hong Kong is down 1.3%.
By Daniel Ruiz; danielruiz@alliancenews.com
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