Worldpay Group Share News (WPG)

LONDON (Alliance News) - After starting the day lower due to weak Chinese trade data, stocks in London spent most of Tuesday afternoon tracking movements in oil prices, which slipped just after making a new 2016 high.

Brent crude started Tuesday continuing its recent good form and reaching its highest level since early December at USD41.45 a barrel. However, before investors could get too optimistic it fell sharply shortly after.

By the London stock market close Brent traded at USD40.03 a barrel, not far from the level seen at the London close on Monday of USD39.86 a barrel.

West Texas Intermediate followed a similar trend, reaching its highest level since late December at USD38.36 a barrel, but then falling to USD36.98 a barrel by the European equity close on Tuesday.

"Whilst it spent most of the morning at or near three month highs, negative notes from Goldman Sachs and UBS and, more importantly, a refusal from Kuwait to cut its oil output soon saw the commodity dip its toes back below USD40 per barrel, ensuring the global indices couldn't turn the slight post-US open recovery into anything approaching positive momentum this afternoon," said Connor Campbell, financial analyst at Spreadex.

There could yet be more volatility for oil prices later in the evening when the American Petroleum Institute discloses its crude oil stocks at 2130 GMT.

Gold prices also saw its recent rally slow as it fell from an intraday high of USD1,278.00 an ounce. At the London close, the metal was quoted at USD1,268.52 an ounce, only a touch higher than USD1,266.00 seen at the corresponding time on Monday.

The FTSE 100 index ended down 0.9%, or 56.96 points at 6,125.44. The FTSE 250 index closed down 1.1%, or 177.40 points, at 16,654.03 and the AIM All-Share finished down 0.6%, or 3.85 points, at 700.03.

In Europe, both the CAC 40 in Paris and the DAX 30 in Frankfurt ended down 0.9%.

The euro appreciated against the dollar, helped slightly by a better-than-expected GDP reading from the eurozone. GDP growth held steady at 1.6% year-on-year in the fourth quarter but was revised up from the initial estimate of 1.5%, published on February 12.

GDP grew 0.3% quarter-on-quarter, in line with the first estimate. The economy also logged a 0.3% quarterly expansion in the third quarter.

At the London stock market close, the euro traded the dollar at USD1.1042, higher than the USD1.0988 seen at the same time on Monday.

The pound depreciated versus the greenback to trade at USD1.4218 at the London close on Tuesday, lower than USD1.4230 at the close on Monday.

On Wall Street at the London close, the DJIA was down 0.5%, the S&P 500 down 0.7% and Nasdaq Composite down 0.6%.

Stocks in the US and Europe were pushed lower by poor economic data from China, which showed the country's trade performance deteriorated sharply in February, with both exports and imports declining more than analysts expected.

A report by the Chinese General Administration of Customs showed exports fell 25% from a year earlier in dollar terms, considerably worse than the 13% decline expected by economists and marking the biggest fall since May 2009. Imports, meanwhile dropped 14% year-on-year, extending declines for the 16th straight month, suggesting the country continued to suffer from weak global demand and a slowdown at home.

Fawad Razaqzada, technical analyst at FOREX.com and City Index, said even though the trade figures may have been affected by the Chinese New Year, which fell in early February, the data is still worrying.

"The slump does ring alarm bells about the pace of the slowdown at the world's second largest economy. If the trend of weaker data continues, then the Chinese government's own full year growth target range of 6.5 to 7.0 per cent will start to look ambitious," Razaqzada said.

Mining stocks felt the worst of the sell-off in London due to their exposure to China, the largest consumer of metals in the world. Glencore closed as the worst performer in the FTSE 100, down 18%, Anglo American fell 15%, and Antofagasta down 9.5%.

Worldpay Group ended down 8.5%, even though it said it swung to a pretax profit in 2015 in its maiden set of results since becoming a publicly listed company.

Pretax profit amounted to GBP19.1 million in 2015, versus a pretax loss of GBP47.1 million in 2014, the payments processing company said. Worldpay processed 13.1 billion transactions in 2015, up 14% on the number processed in 2014, driving net revenue up by about the same percentage to GBP981.7 million.

Worldpay declared no dividend for 2015, in line with its guidance at the time of its IPO.

Burberry Group led the blue-chip gainers, up 5.2%. The fashion house has sought help from its financial advisers to defend itself against a possible takeover bid after a mystery investor built up a 5.0% stake in the company, the Financial Times reported.

A person close to the company said Burberry had unsuccessfully attempted to obtain the identity of the investor from HSBC, which is listed as the custodian for the stake, according to the FT.

In the FTSE 250, banking, securities and asset management company Close Brothers Group lifted its interim dividend, reported an increase in first-half profit, and said it expects a "satisfactory performance" for its current financial year as a whole.

Pretax profit rose to GBP108.7 million in the six months ended January 31, Close Brothers said in a statement, up from GBP106.2 million in the corresponding half the prior year. The financial company lifted its interim dividend to 19.0 pence from 18.0p

However, Close Brothers ended down 9.0%, one of the worst performers in the FTSE 250. Panmure Gordon and Numis cut their respective ratings on the company as both brokers struggled to find scope for the shares to re-rate further following a rally in the stock.

CLS Holdings' pretax profit fell in 2015, with the gain in the valuation of its property portfolio being half of what it was in 2014. The property investor reported pretax profit of GBP151.2 million for 2015, down from GBP236.8 million the previous year, as it registered a GBP98.0 million gain in the valuation of its property portfolio, compared to a GBP186.0 million gain in 2014.

However, CLS is proposing a tender offer buyback of 1 in 57 shares at 1,810 pence per share in April, with a plan to distribute GBP13.4 million to its shareholders, equivalent to 31.8 pence per share. This would bring total shareholder distributions for 2014 to GBP19.1 million, up 20% year-on-year. CLS said, effective Tuesday.

The stock was one of the best performers in the FTSE 250, up 3.8% to 1,621.00p.

In the economic calendar for Wednesday, the main focus will be on UK industrial and manufacturing production data at 0930 GMT.

Also on Wednesday, US mortgage applications are at 1200 GMT and US wholesale inventories are at 1500 GMT, at the same time as the National Institute of Economic and Social Research's UK GDP estimate. Just after is the US Energy Information Administration's crude oil stocks at 1530 GMT.

In the UK corporate calendar, FTSE 100-listed life insurer Prudential is the highlight, as it releases full-year results at 0815 GMT.

At 0700 GMT, there is a trading statement from packaging company DS Smith, as well as full-year results from restaurant operator Restaurant Group, security services company G4S, building products distributor SIG and motor retailer and aftersales provider Lookers, among others.

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

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