LONDON MARKET CLOSE: Stocks Mixed As Oil-Related Stocks Limit Progress

LONDON (Alliance News) - Stocks in London ended mixed, with shares in International Hotels Group and Whitbread among the best performers after reporting positive updates, as the main indices were limited by oil-related stocks.

"It is difficult to discern much of a general theme to today's action in London, but decent results from Intercontinental Hotels and Whitbread have been rewarded, helping to prevent further losses in the [FTSE 100] index," said IG analyst Chris Beauchamp.

Intercontinental Hotels Group led the gainers, closing up 5.3%, after the company said it achieved record hotel signings in the third quarter of 2015.

However, it reported a drop in revenue per available room due to the effects of currency translation, although it grew in three of its four operating regions on a constant exchange rate basis.

The hotel operator, which owns brands including Holiday Inn, Crowne Plaza and InterContinental Hotels, said global RevPAR in the third quarter fell 0.4% on the same period the year before due to the strengthening of the dollar, although it grew 4.8% at constant exchange rates, led by a 3.6% rise in room rates.

Regionally, RevPAR grew 4.3% in the Americas at constant exchange rates, 7.8% in Europe and 7.1% in Asia, the Middle East and Africa, but was down 0.7% in Greater China.

Shares in Whitbread closed up 2.6%. The company said that double-digit sales growth for both Premier Inn and Costa Coffee pushed the company's interim profit higher, leading the group to express confidence in its medium-term targets as it continues to invest heavily in both of the two booming consumer businesses.

Following Whitbread's update, Numis upgraded the company to Add from Hold.

The FTSE 100 index ended down 0.1% at 6,345.13, the FTSE 250 closed up 0.4% at 16,984.03 and the AIM All-Share finished up 0.2% at 745.00. In Europe, the French CAC 40 index ended down 0.6% and the German DAX 30 closed down 0.2%.

Asian stocks ended mixed, with the Hang Seng in Hong Kong down 0.4% and the Shanghai Composite up 1.1%. The Japanese Nikkei 225 index closed up 0.4%.

Meanwhile, shares in New York were mixed at the London close, with the Dow 30 and the S&P 500 flat and the Nasdaq Composite down 0.3%.

As the US earnings season continues, US investors saw telecommunications giant Verizon Communications beat analysts' estimates as it reported a 9% year-on-year increase in its profit for the third quarter, aided by customer demand for its wireless and Fios fiber-optic-based services.

Still in a busy US corporate calendar, technology company Yahoo, restaurant chain Chipotle Mexican Grill and electronics manufacturing services company Celestica are expected to release updates after the US market close.

In London, Bank of England policymaker Ian McCafferty said that the central bank should consider to begin interest rate hikes now if it wants to proceed with the tightening cycle only gradually in order to reduce the impact on households and businesses.

"If we on the Monetary Policy Committee are to achieve our ambition of raising rates only gradually, so as to minimize the disruption to households and businesses of a normalization of policy after a long period in which interest rates have been at historic lows, we need to avoid getting 'behind the curve' with respect to the neutral rate," McCafferty said in a speech delivered at the Bloomberg headquarters in London.

"And for me, that provides an additional justification not to leave the start date for lift off too late," warned McCarfferty, who is a well-known hawk, who again voted for a rate hike in the central bank's most recent meeting from October 8.

The BoE interest rates have been held at a record low 0.50% since March 2009. Other policymakers including Governor Mark Carney have signaled that it is time to think of raising rates. However, no move has been made so far, amid the persistently low inflation.

Governor Mark Carney speaks Wednesday at Oxford University at 1800 BST. He is expected to focus on how the UK's EU membership affects the central bank's ability to manage the economy and protect the country's banking sector.

At the London close, the pound was flat in the day at USD1.5464 while the euro was slightly higher at USD1.1343. Meanwhile, Gold prices were higher in the day at USD1,174.70 an ounce.

Elsewhere on the London Stock Exchange, commodity stocks ended lower, with oil-related companies in the red amid falling oil prices. Brent oil prices fell below the USD50 a barrel line, standing at USD48.62 a barrel at the London close. West Texas Intermediate also was lower, at USD46.45 a barrel.

Royal Dutch Shell 'B' shares were down 0.9%, as were shares in BP. In the FTSE 250, Premier Oil lost 3.1% and Tullow Oil 4.0%. Hunting closed down 2.5%, Amec Foster Wheeler down 1.1%, and Petrofac down 0.6%.

Satellite communications company Inmarsat, up 2.8%, said it has signed a deal with German carrier Lufthansa to provide high-speed in-flight connectivity services for passengers on its European continental fleet. The deal, which follows a memorandum of understanding the pair signed last month, will provide a contract framework for the London-listed company to extend the service to other carriers.

It will equip more than 150 Lufthansa jets with Global Xpress technology, with additional aircraft to be fitted in due course. The first will be equipped and tested in early summer 2016.

At the other end of the index, Tesco ended down 1.8%. The supermarket's sales fell in the 12 weeks to October 11, down 1.7%, a sharper decline than that of Wm Morrison Supermarkets, in contrast to the 1.1% rise in sales posted by rival J Sainsbury. Asda, the second-largest grocer in the UK behind Tesco, saw its sales fall 3.0% in the period.

Morrisons shares rose 0.3%, while Sainsbury's finished flat.

In the FTSE 250, AVEVA Group ended up 3.8% at 2,084.42 pence. Berenberg lifted its rating on the engineering software company to Buy from Hold and increased its price target to 2,450 pence from 1,977p. The broker said it was on optimism that the reverse takeover of the company by France's Schneider Electric will go through, despite market uncertainty which appears to have affected AVEVA's share price.

Vedanta Resources was down 5.8%. The miner dismissed media speculation that Chief Executive Tom Albanese is leaving the company. Reports emerged in India, where it has mining, oil and power projects, on Tuesday that suggested Albanese was set to leave the company.

In the corporate calendar Wendesday, ARM Holdings releases third-quarter results and Sky publishes first-quarter results. Reckitt Benckiser issues a third-quarter interim management statement, while Computacenter issues a third-quarter trading statement. Development Securities and Home Retail Group both release half-year results.

In a light economic calendar, UK's public sector net borrowing data are due at 0930 BST. In the US, EIA crude oil stocks are due at 1530 BST.

By Daniel Ruiz; danielruiz@alliancenews.com

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