LONDON (SHARECAST) - - Barclays to take another unexpected hit from PPI claims
techMARK 2,112.67 +0.19%
FTSE 100 5,917.05 +0.10%
FTSE 250 12,071.25 +0.21%
- Chinese data boosts miners
- Markets cautious before EU summit
After swinging between gains and losses for most of the session, UK stocks finished flat on Thursday despite some robust growth figures from China, as some worse-than-expected US data and the EU summit weighed on investors' minds.
Chinese gross domestic product (GDP) grew at a 7.4% year-on-year rate in the third quarter of the year as expected, down from the 7.6% in quarter two. While this was the slowest rate of expansion in 12 years - except for that seen in the first quarter of 2009 - economists reckons that they can see hopeful signs which point to a stabilisation, such as a better tone to exports and a progressive improvement in residential investment.
"China, one of the few global economies still experiencing strong growth is very much viewed as one of the engines to keep global demand high," said trader Simon Furlong from Spreadex.
Stocks fell in afternoon trade after US weekly initial jobless claims rose by 46,000 last week to 388,000, as the seasonal factors evident in last week's data were unwound. Consensus estimates were for a rise to 365,000.
Investors were also keeping a close eye on the EU summit in Brussels today at which leaders are expected to discuss several topics such as the bailout for Spain, the situation in Greece and the banking union although only this last item is officially on the agenda.
Despite the enormous importance of the issues at stake, and as is often the case, market expectations are low ahead of this meeting of the heads of state of the 27 member countries. It's no wonder as there have been some 22 summits since the crisis in Greece began to intensify in 2009, including four already in 2012 alone.
In domestic economic news, UK retail sales volumes rose 0.6% from August to September, according to the Office for National Statistics. Consensus expectations were for a gain of 0.4%.
FTSE 100: Barclays drops into red after PPI revelation
Barclays was unwanted after revealing a shock additional £700m provision against payment protection insurance (PPI) compensation claims. Analysts believe that this will lead the bank to unveil a third-quarter pre-tax loss of at least £100m. Sector peer Lloyds also finished lower after Investec downgrade its rating for the stock from 'hold' to 'sell' as it trades at a 12-month high.
Airline group IAG was a high flyer after the International Air Transport Association said that premium traffic rebounded strongly in August, up 8.5%. Investec retained its 'buy' rating on the stock today, saying that IAG has the "management desire and ability to effectively transform the Iberia business and drive margin and strategic improvements at BA."
Retail-focused real estate investment trust Capital Shopping Centres was among the worst performers after Barclays placed shares in the company, according to media reports that cite two people familiar with the deal.
Miners were performing well this afternoon after the decent figures from China strengthened prices. Kazakhmys, EVRAZ, Rio Tinto and ENRC were all firmer by the close. Steel giant EVRAZ was in demand even though it saw production decrease in the third quarter while prices were hit by tough conditions in global steel markets.
Supermarket giants Tesco, Morrison and Sainsbury's were on shopping lists this morning after the better-than-expected retail sales data.
Drinks giant SABMiller was among the fallers this morning despite seeing good growth in lager volumes shipped across most regions in the first half of its financial year. Weighing on the shares was a ratings downgrade by Shore Capital to 'hold'.
Oil firm Royal Dutch Shell was also hit after Goldman Sachs lowered its recommendation for the oil titan to 'sell' and cut its target price for the shares from 2,840p to 2,260p.
Sector peer BP was making gains after Rosneft offered $28bn in cash and shares for its 50% interest in Russian joint venture TNK-BP.
FTSE 250: Man down as funds flow the wrong way
Fund manager Man Group dropped 10% today despite a 14% rise in funds under management in the third quarter. The market was alarmed, however, to see net outflows in the quarter increase to $2.2bn, compared with net outflows of $1.4bn in the second quarter, although Man said these were concentrated in lower margin product lines.
Credit Suisse reiterated its 'neutral' stance on the shares today, saying that they trade "on an estimated 2013 fiscal year price-to-earnings multiple of 14.9-times which appears fully valued, in our view."
Leading the upside on the second-tier index was cash and carry group Booker after saying that like-for-like sales rose 3.1% for the 24 weeks to September 14th.
Transport group Go-Ahead also gained after reporting that bus operating profits should be £100m by 2015/16, compared with the £64-70m range over the past five years.
FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG) 163.80p +3.93%
IMI (IMI) 943.50p +3.51%
GKN (GKN) 214.00p +3.38%
Kazakhmys (KAZ) 780.50p +2.70%
Evraz (EVR) 258.90p +2.49%
Rio Tinto (RIO) 3,260.00p +2.39%
Eurasian Natural Resources Corp. (ENRC) 359.80p +2.16%
Weir Group (WEIR) 1,821.00p +2.02%
Resolution Ltd. (RSL) 222.10p +1.93%
Wolseley (WOS) 2,745.00p +1.82%
FTSE 100 - Fallers
Fresnillo (FRES) 1,918.00p -2.34%
Randgold Resources Ltd. (RRS) 7,570.00p -2.26%
British Sky Broadcasting Group (BSY) 733.50p -2.13%
SABMiller (SAB) 2,599.00p -2.09%
Capital Shopping Centres Group (CSCG) 333.40p -1.80%
Bunzl (BNZL) 1,082.00p -1.55%
Barclays (BARC) 240.70p -1.51%
Royal Dutch Shell 'B' (RDSB) 2,202.00p -1.37%
Smith & Nephew (SN.) 656.50p -1.28%
Reed Elsevier (REL) 610.00p -1.21%
FTSE 250 - Risers
Booker Group (BOK) 100.60p +6.62%
Brown (N.) Group (BWNG) 320.70p +6.54%
Go-Ahead Group (GOG) 1,365.00p +5.81%
Cookson Group (CKSN) 567.00p +4.23%
Dechra Pharmaceuticals (DPH) 618.00p +3.78%
Kenmare Resources (KMR) 42.34p +3.27%
Premier Farnell (PFL) 177.80p +3.25%
International Personal Finance (IPF) 343.20p +3.22%
Jupiter Fund Management (JUP) 272.00p +3.11%
Halfords Group (HFD) 335.40p +2.92%
FTSE 250 - Fallers
Man Group (EMG) 83.40p -9.89%
UBM (UBM) 696.50p -3.60%
Capital & Counties Properties (CAPC) 223.50p -3.58%
Petra Diamonds Ltd.(DI) (PDL) 100.40p -3.55%
Bumi (BUMI) 245.10p -3.50%
Stobart Group Ltd. (STOB) 113.40p -3.49%
Ophir Energy (OPHR) 553.50p -3.49%
F&C Asset Management (FCAM) 95.60p -3.34%
Jardine Lloyd Thompson Group (JLT) 750.00p -2.98%
PayPoint (PAY) 750.00p -2.79%