LONDON MARKET OPEN: Ex-Dividends Weigh On FTSE 100 As Centrica Rises

LONDON (Alliance News) - London's blue-chip FTSE 100 index was marked lower at the open Thursday, as several hefty constituents went ex-dividend, while shares in British Gas owner Centrica rose after full-year results beat analyst estimates.

The FTSE 100 gas distributor and producer reported a 4% fall in net earnings to GBP863.0 million in 2015 from GBP903.0 million in 2014, but the figure was significantly higher than analyst expectations of GBP733.0 million.

Adjusted operating cashflow, which Centrica said would be a "major focus" back in December, came in ahead of Centrica's guidance at GBP2.25 billion, which was also up 2% from GBP2.20 billion last year. Revenue for 2015 fell 5% to GBP28.00 billion.

The company was the biggest gainer in blue-chip index at the start of trade, up 2.9%.

BAE Systems was another top performer, up 2.3%. The defence contractor said recovering global defence budgets should result in higher earnings in 2016, even though pretax profit was given a one-off boost in 2015 by aircraft deliveries to Saudi Arabia.

BAE said its underlying earnings per share in 2016 should be around 5% to 10% higher than in 2015, helped by defence budgets increasing around the world and by growing sales in its cyber security and international sales, which will offset declines in the US and UK.

Pretax profit rose to GBP1.09 billion in 2015 from GBP882.0 million in 2014, helped by a rise in revenue to GBP17.90 billion from GBP16.64 billion and lower impairment and amortisation charges.

Heavyweight stocks which went ex-dividend dragged on the FTSE 100. Pharmaceutical giants GlaxoSmithKline and AstraZeneca were down 2.9% and 1.9% respectively, while Royal Dutch 'A' and 'B' Shares were down 2.4%.

Mining stocks also were weighing on the blue-chip index, as they gave up some of their strong gains from Wednesday.

Just after the open, the FTSE 100 was down 0.5% at 6,002.74, while the FTSE 250 was up 0.2% at 16,188.66 and the AIM All-Share was up 0.5% at 681.55.

In Europe, the French CAC 40 was up 0.2% and the DAX 30 up 0.3%.

French consumer price inflation held steady at the beginning of the year as initially estimated, final figures from the statistical office Insee showed. The consumer price index rose 0.2% year-over-year in January, the same rate of increase as in the previous month. The figure was also matched the reading in the preliminary report.

Asian stock markets ended largely higher. The Nikkei 225 index in Tokyo closed up 2.3% and the Hang Seng in Hong Kong up 2.1%, but the Shanghai Composite slipped 0.2%.

In the FTSE 250, Go-Ahead Group traded up 5.6%. The transport operator said its first-half results met its expectations and affirmed its outlook for the full year as it saw solid performances in its bus and rail divisions.

The company said pretax profit for the half-year to December 26 was GBP52.1 million, up from GBP44.7 million a year earlier, helped by a big rise in profit from its rail division.

Revenue rose to GBP1.67 billion from GBP1.56 billion, lifted by passenger volume growth in its regional bus division, which was helped by contract wins, and by a good performance for London buses, albeit with the latter hurt by reduced quality incentive income due to the proliferation of roadworks across the capital.

Go-Ahead will pay an interim dividend of 28.33 pence per share, up from 26.60p a year earlier.

Tullow Oil was the worst mid-cap performer, down 7.8% after it implemented extra "operational procedures" on the floating production, storage and offloading vessel serving the Jubilee field offshore Ghana after identifying an potential issue in the turret area.

Tullow said an inspection of the turret area of the FPSO was carried out by SOFEC, the original manufacturer of the turret, which identified "a potential issue" with the turret bearing.

"As a precautionary measure, additional operating procedures to monitor the turret bearing and reduce the degree of rotation of the vessel are being put in place," said Tullow.

Still ahead in the economic calendar is the release of the minutes from the European Central Bank's monetary policy meeting in January at 1000 GMT, after eurozone current account data at 0900 GMT. In the afternoon, US initial and continuing jobless claims are at 1330 GMT at the same time as the Philadelphia Fed manufacturing survey. The US Energy Information Administration releases crude oil stocks at 1600 GMT.

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

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