LONDON MARKET MIDDAY: Stocks Mixed Ahead Of BoE, ECB And Fed Releases

Thu, 08th Oct 2015 10:49

LONDON (Alliance News) - Shares in London were mixed Thursday midday, while New York stocks were called for a negative open, as investors await releases from the Bank of England, European Central Bank and US Federal Reserve.

The Dow 30 and the Nasdaq 100 indices were both pointed down 0.4% and the S%P 500 was seen down 0.3%.

After the London close, the US Federal Reserve's is expected to release the minutes from its last policy meeting held in September at 1900 BST. But before that, the focus will be in US initial and continuing jobless claims data, due at 1330 BST.

Initial jobless claims to the week ended in October 2 are expected to come in at 274,000, following the 277,000 seen a week earlier. Meanwhile, continuing jobless claims for the week ending September 25 are called to come in at 2.2 million, broadly flat on the 2.2 million claims the week before.

Still in the US economic calendar, EIA natural gas storage data are due at 1530 BST, while Federal Reserve Bank of St. Louis President James Bullard gives a speech before the Children's Saving Account Symposium hosted by the Federal Reserve Bank of St. Louis.

Outside the US, central banks in the UK and Europe will be the main focus for investors on Thursday. The Bank of England will be first out the gate, with its monetary policy decision and meeting minutes at midday London time. Analysts expect the bank to keep interest rates at 0.5%, with a vote split of 8-1 in favour of keeping rates on hold, matching last month's split.

Hann-Ju Ho, senior economist at Lloyds Bank, said the lower revision to second quarter UK GDP at the end of September suggests less productivity growth and therefore greater cost pressures.

"This raises the risk that another [Monetary Policy Committee] member may join Ian McCafferty in voting for an immediate rate rise, supported also by sterling?s fall over the past month which would help to ease deflation concerns. On balance, though, we believe an unchanged 8-1 vote split is the most likely outcome," Ho says.

At 1900 BST, Bank of England Governor Mark Carney participates in the International Monetary Fund annual meeting taking place in Lima, Peru.

The ECB then will release its monetary policy meeting accounts at 1230 SBT.

"The minutes of the ECB?s last meeting on September 3 could attract some attention, especially if further policy stimulus options are discussed, though they are more likely to reiterate that the Governing Council stands ready to act should conditions warrant it," reckoned Lloyds.

European stock indices were also mixed, with the French CAC 40 down 0.1% and the German DAX 30 up 0.1%.

In London, the FTSE 100 index was up 0.3% at 6,352.54 points, the FTSE 250 was down 0.4% at 16,967.44 and the AIM All-Share was down 0.1% at 732.66.

Satellite communications company Inmarsat led the blue-chip fallers, down 3.2%. It reiterated its guidance for the full year as it said no material change in its trading environment is expected for the rest of 2015.

The company said it expects group revenue for the full year to be USD1.25 billion to USD1.30 billion, including USD70.0 million in revenue from its cooperation agreement with LightSquared. The company is holding a Capital Markets Day on Thursday and said it will discuss its approach to future financial guidance.

Marks and Spencer Group was down 1.5% after being downgraded by Peel Hunt to Sell from Hold. This comes a day after JPMorgan cut its recommendation on the retailer to Underweight from Neutral.

Shares in paper and packaging company Mondi were down 1.0% despite it reported growth in its third quarter underlying operating profit, with the broker saying that it expects earnings momentum in the whole paper and packaging sector.

The Anglo-South African paper and packaging company said underlying operating profit in the third quarter rose 27% in the third quarter year-on-year to EUR221.0 million, up from EUR174.0 million a year earlier, following strong trading in its Packaging Paper and Uncoated Fine Paper units and in its business in South Africa.

In the mid-cap index, Tullow Oil was up 2.0% after it said it has regained its 7.5% stake in the Onal Complex fields and the Ezanga block in Gabon after the company reached an agreement with the government.

In addition, JPMorgan upgraded the oil company to Overweight from Neutral.

Dunelm Group was up 1.8%. The homewares retailer reported growth in sales in the first quarter of its financial year which it said was due to improved product ranges, seasonal merchandise, and a better shopping experience for customers.

Dunelm said total sales in the 13 weeks to October 3 grew 12% to GBP202.3 million from GBP180.6 million the year before, as like-for-like sales rose 5.5% to GBP183.3 million from GBP163.1 million. It said trading was strong both in-store and online, with all categories showing a robust performance.

In the red, shares in Weir Group were down 3.8%. The engineering services company was downgraded to Sell from Neutral by Investec.

The broker said that while the difficulties of the group's oil and gas division are well understood, its minerals business could be facing more severe profit revisions than currently expected and, though shares in the company have fallen significantly since the start of August, all the bad news may not be priced in.

In AIM, Atlantic Coal was up 14%. The coal miner said revenue in the first nine months of 2015 was around 26% higher year-on-year, and the miner said it expects total second half revenue to "at least match" the first.

The company said revenue in the first nine months of 2015 totalled around USD17.8 million, rising from USD14.1 million in the same period a year earlier. Those numbers are unaudited, and the company said it plans to release its unaudited revenue figures in its quarterly statements going forward.

In addition, the company said it is currently "experiencing a number of positive factors", including continuing high levels of production and sales for both its clean coal and run-of-mine coal and a large inventory of coal as it enters the winter period, which generates more demand due to colder weather.

By Daniel Ruiz; danielruiz@alliancenews.com