MARKET COMMENT: London Closes Higher As Oil Hits Four-Year Low

LONDON (Alliance News) - UK shares have closed broadly higher Tuesday, while Brent oil hit a four-year low, resulting in mixed fortunes for individual stocks, which also were driven by company updates on another light day of economic data.

The FTSE 100 closed up 0.2% at 6,627.40. The FTSE 250 also closed up 0.2% at 15,630.69. The AIM All-Share index underperformed again, closing down 0.3% at 721.40.

In Europe, the French CAC 40 outperformed London, gaining 0.5%, while the DAX 30 closed up 0.2%.

US stock indices were reading flat at the London close.

About the same time, the price of Brent oil hit its lowest level in more than four years, at USD80.44 per barrel. Airline and cruise operators shares benefited from Brent's price weakness throughout the day, while oil producers took a hit.

At the close of trade in London, easyJet, up 2.3%, British Airways owner International Consolidated Airlines Group, up 1.8%, and Carnival, up 1.4% were amongst the top gainers in the blue-chip index.

Tullow Oil, down 5.1%, BG Group, down 1.9%, BP, down 1.3%, Royal Dutch Shell 'B', down 0.8%, and Royal Dutch Shell 'A', down 0.7%, were amongst the biggest losers. In the FTSE 250, Afren, down 5.7%, and Premier Oil, down 2.8%, also were amongst the losers.

In addition, Tullow Oil, which ended as the biggest blue-chip faller, had its price target cut by 32% to 685.00 pence from 1,000.00p by HSBC. The stock closed trade at 482.20p.

Vodafone Group led the FTSE 100 for much of the day, ending up 5.4%, after it said its multi-billion pound investments to improve its 3G networks and build faster 4G networks was starting to pay off, with more data being shifted over its networks.

The mobile giant said data traffic was up 77% in the first half, but that accelerated to 80% growth in the second quarter, driven by 4G in Europe and 3G in India. That helped drive a 5.5% increase in its earnings before interest, tax, depreciation and amortisation in its first half, causing it to narrow its guidance for the full-year towards the upper end of its previous expectation.

Vodafone said it now expects earnings before interest, tax, depreciation and amortisation for the current financial year, ending March 2015, to be between GBP11.6 billion and GBP11.9 billion. At the time of its full-year results in May, the company had guided an EBITDA range between GBP11.4 billion and GBP11.9 billion for the year.

Land Securities Group was another strong performer Tuesday, closing trade 2.3% higher. The commercial property company said the shift in its retail portfolio to better quality properties is paying off, as it reported higher net asset value per share and a 7.5% valuation surplus over the first half of its financial year.

In the FTSE 250, Renishaw was the stand-out performer, closing up 9.3%. The measurement instruments and healthcare products manufacturer said it continued to see strong demand across its product lines and will increase investment in manufacturing capacity in order to meet this demand. In a trading statement, the company said its anticipates pretax profit for the full year to be GBP95 million to GBP105 million, on revenue of between GBP425 million and GBP445 million.

Shares in housebuilder Taylor Wimpey also rose on Tuesday, up 4.1%. The company upgraded its operating margin growth forecast for 2014 and reiterated its medium-term forecasts, saying the recent slowdown in the UK housing market meant it is now growing at a steady and sustainable rate.

The first substantial economic data of the week is due on Wednesday, with the Bank of England's quarterly inflation report at 1030 GMT being the highlight for UK investors. The report could potentially move markets if it gives a clue to when the central bank will hike interest rates.

Also in the calendar is UK unemployment and wage data at 0930 GMT and eurozone industrial production for September at 1000 GMT. In the afternoon, there is US wholesale inventories for September at 1500 GMT.

It is busy on the corporate front as well Wednesday, with interim management statements from outsourcing company Capita, security company G4S, and Tullow Oil. There also will be half-year results from UK grocer Sainsbury's, which pipped Vodafone in late trade to close as the biggest gainer in the FTSE 100 Tuesday.

Energy provider SSE and British luxury fashion retailer Burberry Group also are providing half-year earnings reports.

By Neil Thakrar; neilthakrar@alliancenews.com

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