LONDON MARKET OPEN: Oil And Dovish Fed Minutes Boost London Equities

LONDON (Alliance News) - UK-listed stocks got off to a positive start Thursday, boosted again by a higher oil price and by the minutes of the last Federal Reserve meeting which showed officials were leaning against an immediate interest rate hike in the US.

The FTSE 100 was up 0.6%, or 37.18 points to 6,198.81. The index was helped by a dovish set of minutes from the Federal Open Market Committee's March meeting, published after the London close on Wednesday.

The minutes revealed a number of Fed officials argued against an April rate hike, thinking this would signal a sense of urgency they did not think appropriate.

Wall Street closed higher after the FOMC minutes. The Dow Jones Industrial Average closed up 0.6%, the S&P 500 ended up 1.1% and the Nasdaq Composite up 1.6%.

London's mid-cap FTSE 250 index was up 0.3% to 16,913.89, and the AIM All-Share was up 0.2% to 716.89. European equities also were higher. The CAC 40 in Paris was up 0.3% as the DAX 30 in Frankfurt.

In Asia, the Japanese Nikkei 225 index closed up 0.2%, the Shanghai Composite ended down 1.4%, and the Hang Seng in Hong Kong is up 0.1%.

Higher oil prices had lifted London stocks on Wednesday and continued doing so on Thursday after making overnight gains. Just after London equities open, Brent oil traded at USD39.90 a barrel versus USD39.38 a barrel at the London stock market close Wednesday. West Texas Intermediate was at USD37.86 a barrel against USD37.60 late Wednesday.

Oil prices were buoyed by a reduction in US crude oil inventories. The US Energy Information Administration said its crude oil inventory declined by 4.9 million barrels in the week ending April 1. It was the first decline in the EIA's crude oil stocks in eight weeks.

Marks & Spencer Group early Thursday reported growth in sales in the fourth quarter of its financial year, as a rise in food sales offset a decline in general merchandise.

The FTSE 100 food, clothing and homewares retailer said group sales in the 13 weeks ended March 26 were up 1.9% on the same period the year before. The food division achieved sales growth of 4.0% while the struggling general merchandise business saw sales fall by 1.9%, although this decline was slower than in the previous quarter.

On a like-for-like basis, food sales were flat and general merchandise sales were down 2.7%. The stock traded up 1.3.

Ex-dividend stocks made up a large part of the FTSE 100's fallers list. Education and publishing company Pearson was the worst performer in the blue-chip index, down 6.8%, insurer Aviva was down 2.0% and Lloyds Banking Group was down 1.9%.

Also amongst the biggest fallers in FTSE 100 was Worldpay Group, down 3.0%, after Bank of America Merrill Lynch said two private equity firms that are invested in the London-listed payments company have sold all of the shares they put up for sale under a placing, selling a 13.8% stake in the company for GBP740.0 million.

Advent International and Bain Capital made 275.0 million shares that they held in Worldpay available for sale under a placing launched on Wednesday, with Barclays Bank, Goldman Sachs International, Merrill Lynch International and Morgan Stanley & Co International acting as joint bookrunners.

Early Thursday, it was revealed that all of those shares were sold at a price of 269.0 pence per share, raising GBP740.0 million in total. None of those proceeds will be going to Worldpay. The stock traded at 274.26p just after the open.

In the FTSE 250, retailer Dunelm Group was the best performer, up 4.9%, after it reported growth in revenue in the third quarter of its financial year, driven by like-for-like growth and a rise in online home delivery sales.

The homewares retailer said total revenue in the 13 weeks ended April 2 grew by 5.9% to GBP229.0 million on the same period the year before.

Total like-for-like sales increased by 1.1%, but Dunelm said growth was reduced by around 4.9%, or GBP10 million, due to it having six days fewer of winter sales as result of the prior year including a 53rd week. This was partially offset, however, by the timing of Easter this year which contributed 1.0% towards like-for-like growth.

Dunelm said it saw strong footfall in like-for-like stores in the quarter, with improved conversion and higher transaction values. The online business also demonstrated good growth, with a 28% rise in home delivery sales.

Centamin, up 3.1%, said gold production increased during the first quarter of 2016 as the company remains on track to deliver on its full-year guidance.

The company, which derives all of its production from the Sukari mine in Egypt, said total gold production in the first quarter amounted to 125,268 ounces of gold, which is 6.5% higher than the previous quarter and a 16% increase from the same period a year earlier.

That production can be compared to the 117,644 ounces produced in the final quarter of 2015, and the 108,233 ounces produced in the first quarter of 2015.

"With quarterly production rates expected to remain within the 450,000 to 500,000 ounces per annum range, our full-year guidance remains unchanged at 470,000 ounces," said Chief Executive Andrew Pardey.

Flybe Group shares were down 5.8% after the UK regional airline said its results for the year to the end of March are set to hit expectations as its load factor fell and passenger numbers were flat in the fourth quarter.

Flybe said its passenger volumes in the quarter to the end of March were flat at 1.8 million, with passenger revenue also flat year-on-year. Its load factor for the quarter, however, dipped to 68%, down two percentage points year-on-year.

It is another thin economic calendar on Thursday, with the highlight being central banker speeches. The Fed's Yellen is due to speak at 2230 BST, while European Central Bank President Mario Draghi is expected to make a speech in Lisbon.

Also in the calendar is the publication of ECB's monetary policy meeting accounts at 1230 BST, US continuing and initial jobless claims at 1330 BST and US consumer credit at 2000 BST.

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

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