FTSE CLOSE: Footsie finishes flat as oil price rebounds to nearly $45; pound hit by rise in unemployment

17.25: The FTSE 100 closed up 4.91 points at 6410.26 as traders remained cautious after a modest rise in the oil price.

Brent crude was at $44.75 a barrel and US WTI crude at $41.77 today. The US Dow Jones was up 45.6 points at 18,099.2 while Germany's DAX was 71.7 points higher at 10,421.3 and France's CAC 40 rose 25.4 points to 4,591.9.

'US oil inventory data was in focus today and the bigger than expected draw here is helping lend a little support to crude prices, again providing some support for the wider index,' said Tony Cross of Trustnet Direct.

Subsdued start: US stocks were mixed after weaker-than-expected earnings from big companies, such as soft drinks group Coca-Cola and chip giant Intel, and amid a fresh drop in oil prices today

Subsdued start: US stocks were mixed after weaker-than-expected earnings from big companies, such as soft drinks group Coca-Cola and chip giant Intel, and amid a fresh drop in oil prices today

He added: 'Looking back, that UK unemployment data released earlier served as another warning shot as to the fall-out from the uncertainty posed by the Brexit vote.

'Jobless claims rose and wage inflation was well below expectations too, serving as yet more evidence that despite the idea underlying sentiment may be improving, a cautious mood is very much evident amongst businesses right now.'

Sterling came under pressure after official figures revealed unemployment increased for the first time since August 2015. The pound edged lower to just under $1.44, while the pound was up €1.26 against the euro.

The Office for National Statistics said the jobless total jumped by 21,000 between December and February to 1.7 million, while the number of people claiming unemployment-related benefits increased by 6,700 in March to 732,100.

Telecoms giant BT and Paddy Power Betfair both fell after being hit with broker downgrades, dropping 12.9p to 438.3p and 405p to 8925p respectively.

Jefferies cut its recommendation on BT to hold from buy and said the outlook for BT is looking increasingly uncertain.

Meanwhile, Credit Suisse handed Paddy Power Betfair an under-perform recommendation because it said the benefits of its recent tie-up had been "exaggerated" by the market.

Apple chip maker ARM Holdings fell back from gains earlier in the session amid investor concerns over a slowdown in the smartphone market. Shares were down 10p to 954p.

Punch Taverns surged more than 11 per cent or 11.5p to 108.5p, as it insisted it was making good progress on its strategy despite revealing underlying earnings fell from £105million to £94million in the first half of the year.

The firm said it had sold off a number of less profitable pubs as it attempted to cut its £1.4billion debt pile.

Online fashion group N Brown was the biggest faller in the FTSE 250, plunging more than 12 per cent after it reported a 2 per cent fall in annual underlying pre-tax profits to £84.5million and said trading since the year end had been 'subdued'. Shares dropped 40.6p to 275p.

Metro Bank was 33p higher at 2040p as it kicked off life as a listed company with a record first-quarter performance and narrowed losses.

The challenger bank, which floated in March, trimmed underlying losses by 7 per cent to £7.9million, although £3.2million in costs for its stock market listing saw it post bottom-line losses of £11.1million.

The biggest risers in the FTSE 100 were Anglo American up 39.5p to 792p, Rio Tinto up 90.5p to 2423.5p, BHP Billiton up 32.5p to 997p, Standard Chartered up 17.1p to 559p.

The biggest fallers were Hargreaves Lansdown down 61p to 1314p, Paddy Power Betfair down 405p to 8925p, BT Group down 12.9p to 438.3p, Associated British Foods down 83p to 3330p.

17.01: The FTSE 100 closed up 4.91 points at 6410.26. More to come. 

14.45: The Footsie stayed lower in late afternoon trading as US stocks made subdued early progress amid lower oil prices and mixed corporate earnings, while the pound was easier after the first rise in UK unemployment for almost a year.

With around an hour and three quarters of trading to go in London, the FTSE 100 index was 20.7 points, or 0.3 per cent lower at 6,384.7, just closer to the session peak of 6,405.35 than the day’s low of 6,367.36.

European markets were modestly firmer, however, with the CAC 40 index in Paris and Frankfurt’s Dax 30 index both up around 0.2 per cent.

In early trade on Wall Street, the blue chip Dow Jones Industrial Average added 5.4 points at 18,059.1, but the broader S&P 500 index slipped 0.4 points lower to 2,100.4, and the tech-laden Nasdaq composite shed 3.0 points at 4,937.3.

US stocks were mixed after weaker-than-expected earnings from big companies, such as soft drinks group Coca-Cola and chip giant Intel, and amid a fresh drop in oil prices today.

After the ending of a three-day strike by oil workers in Kuwait, which had given oil prices a boost yesterday, Brent Crude shed 2.2 per cent today at $43.07 a barrel.

Among equities in London, falls by heavyweight energy stocks was a drag on the FTSE 100 index with BP losing 4.7p at 358.3p, and Royal Dutch Shell shedding 7.0p at 1,801.5p.

But mining stocks found some support as metal prices held steady amid hopes that top commodities consumer China could still unveil some more monetary stimulus measures after recent mixed data from the world’s second biggest economy.

Anglo American remained the top FTSE 100 gainer, up 5 per cent or 37.7p at 790.2p, while Rio Tinto added 55.5p at 2,388.5p, and BHP Billiton rose 10.7p to 975.2p even though it also joined in yesterday’s move by Rio to trim its iron ore production targets.

On currency markets, the pound was knocked by official data showing unemployment in Britain seeing the first increase since the May-July period of last year, while wage growth fell short of expectations, adding to a view that recent growth in the labour market was easing off.

Against the dollar, sterling was 0.1 per cent lower at $1.4382, and versus the euro the pound shed 0.2 per cent at €1.2663, with the main focus staying on the prospects of a ‘Brexit’ from the European Union after the key referendum in June. 

12.30: The Footsie was weaker but off its lows at lunchtime, just holding below the 6,400 level -breached for the first time in four months yesterday - as oil prices retreated, while the pound was subdued as the first rise in UK unemployment for almost a year pushed out rate hike expectations.

Around mid session, the FTSE 100 index was off 7.4 points, or 0.1 per cent at 6,398.0, albeit close to the session peak of 6,405.35 and well above the session low of 6,367.36.

European markets had rallied higher, with the CAC 40 index in Paris and Frankfurt’s Dax 30 index both adding 0.3 per cent.

And US stock futures pointed to a steadier open today on Wall Street as US corporate earnings remain a big focus, although easier oil prices will still be a drag.

Firm start: US stock futures pointed to a steadier open today on Wall Street as US corporate earnings remain a bog focus, although easier oil prices will still be a drag

Firm start: US stock futures pointed to a steadier open today on Wall Street as US corporate earnings remain a bog focus, although easier oil prices will still be a drag

After the ending today of a three-day strike by oil workers in Kuwait which had given oil prices a boost yesterday, Brent Crude was 1.3 per cent lower today at $43.46 a barrel, although that was off earlier lows.

FXTM Research Analyst Lukman Otunuga, said: ‘The noise of strikes and ongoing talks of production freezes does not however drown out the disappointment from the OPEC meeting in Doha, and with the cartel’s credibility balancing on a thin line, investors may have become skeptical of anything the group has to say regarding freezes and output cuts. Nothing has changed and sentiment remains bearish.’

On currency markets, sterling dipped back after official data showed the number of unemployed in Britain seeing the first increase since the May-July period of last year, while wage growth fell short of expectations, adding to a view that recent growth in the labour market was easing off.

David Cheetham, Market Analyst at XTB.com, said: ‘The unemployment rate did remain at multi-year lows of 5.1 per cent, but having said that a lower than forecast increase in average earnings for the first quarter compared to the same period a year ago means the overall view on the data could be deemed dim.’

The pound steadied, however, at lunchtime, trading flat against the dollar at $1.4395 and down 0.1 per cent versus the euro at €1.2661, with the main focus staying on the prospects of a ‘Brexit’ from the European Union after a referendum in June

Among equities, heavyweight energy stocks saw earlier falls trimmed as oil prices eased off early lows, with BP still off 2.8p at 360.2p, but Royal Dutch Shell rallied to gain 1.5p at 1,810.0p, and mid cap explorer Tullow Oil was up 1.8p at 225.8p.

Mining stocks also found some support as metal prices held steady amid hopes that top commodities consumer China could still unveil some more monetary stimulus measures after recent mixed data from the world’s second biggest economy.

Anglo American was the top FTSE 100 gainer, up 4.6 per cent or 34.5p at 787.0p, while Rio Tinto added 41p at 2,374p, and BHP Billiton rose 18.8p to 983.3p although it also joined in yesterday’s move by Rio to trim its iron ore production targets.

Among corporate news, ARM Holdings remained in demand, ahead 2.3 per cent, or 22p to 986p after the chip designer reiterated expectations for its full year revenues to in line with market expectations, as it reported a rise in first quarter pretax profit to £112million.

Automotive and aerospace components engineer GKN was also a blue chip gainer, up 6.8p at 302.5p after it said trading in the first quarter met its expectations, though it has taken a hit to its trading margin from a shift in the revenue mix of its aerospace arm.

And on the second line, Rentokil Initial rose 3 per cent, or 5.6p to 182.3p, after it said its pest control operations had a strong first quarter, boosted by the big acquisitions it made in North America last year and by robust organic growth. 

10.00: The Footsie stayed weak as the morning session progressed, retreating from yesterday’s four month peak in the face of a reversal by oil prices, while the pound was lower after the first increase in UK unemployment for almost a year.

By mid morning, the FTSE 100 index was down 17.5 points, or 0.3 per cent at 6,387.8, having closed 51.83 points higher yesterday above the 6,400 level for the first time since early December, driven by a rally in oil prices after falls in the previous session.

European markets were also lower, with the CAC 40 index in Paris down 0.2 per cent, and Frankfurt’s Dax 30 index off 0.1 per cent after data showing German producer prices were flat in March versus economists' expectations for a 0.2 per cent increase.

The day’s UK data saw unemployment increase by 21,000 to 1.7 million between December and February, the first increase since the May-July period of last year, according to the Office for National Statistics, although the jobless rate held steady at 5.1 per cent.

Dull day: The Footsie stayed weak, retreating from yesterday’s four month peak in the face of a reversal by oil prices, while the pound was lower after the first increase in UK unemployment for almost a year

Dull day: The Footsie stayed weak, retreating from yesterday’s four month peak in the face of a reversal by oil prices, while the pound was lower after the first increase in UK unemployment for almost a year

ONS statistician Nick Palmer said: ‘It's too soon to be certain but, with unemployment up for the first time since mid-2015, and employment seeing its slowest rise since that period, it's possible that recent improvements in the labour market may be easing off.’

Average earnings growth also disappointed, dipping back to 1.8 per cent in the year to February, 0.3 per cent down on the previous month’s 2.1 per cent increase, and below forecasts for a rise to 2.3 per cent, mainly due to lower bonuses in the financial sector.

On currency markets, after posting a modest rally yesterday, the pound fell back against the dollar and the euro today, down 0.2 per cent against both to $1.4371 and €1.2628 respectively, unsettled by the weak earnings number, which further dented UK rate hike expectations.

Although British households have raised their expectations for inflation to the highest level in eight months, making the prospect of a Bank of England rate rise a little bit less distant in their eyes, according to a survey published today.

Research firm Markit also said rising income from employment pushed up its Household Finance Index to 45.3, one of the highest readings since the survey began more than seven years ago.

Volatile oil prices, however, still remained the main focus in London after a three-day strike by oil workers in Kuwait, which had given crude a boost yesterday ended, reviving worries about oversupply. In morning trading, Brent Crude was down 2 per cent to $43.11 a barrel.

Falls by heavyweight energy stocks was a big drag on the FTSE 100 index, with BP losing 1.9p at 361.1p, while Royal Dutch Shell fell 10.0p to 1,798.5p, and mid cap explorer Tullow Oil shed 4.9p at 219.1p.

Among corporate news, ARM Holdings was the biggest FTSE 100 gainer, up 3.7 per cent,or 36p to 1,000p after the chip designer reiterated expectations for its full year revenues to be in line with market expectations, as it reported a rise in first quarter pretax profit to £112million, up from £103.4million a year earlier

The group said that the start of 2016 had seen its current technology gaining share in target end-markets and strong demand for its next generation of products from a wide range of companies.

Broker comment also had an impact for the blue chips, with telecoms giant BT Group a faller, down 7.8p to 443.4p after Jefferies International cut its rating to hold from buy.

Mobile telecoms giant Vodafone Group was also lower, down 0.6p to 231.8p failing to benefit from an upgrade in rating by Merrill Lynch to buy from neutral.

Luxury goods retailer Burberry Group also fell, losing 17p at 1,275p after being downgraded by Goldman Sachs to neutral from buy.

On the second line, N Brown Group was the worst FTSE 250 performer, dropping 14 per cent, or 45.2p to 270.4p after the plus-sized fashion retailer reported a fall in full year pretax profit to £72.2million, due to exceptional costs, and said that ‘trading since the year end has been subdued’.

But pubs operator Punch Taverns was in demand, gaining 4.5p at 101.5p as it insisted it was making good progress on its strategy despite revealing a fall in first half underlying earnings to £94million from £105million to £94million. 

08.15: The Footsie eased back from yesterday’s four month peak in early trading, tracking overnight falls by Asian markets as oil prices retreated once again, with investors also nervous ahead of the latest UK unemployment and earnings data.

In opening deals, the FTSE 100 index was down 28.0 points, or 0.4 per cent at 6,377.3. The UK benchmark closed 51.83 points higher yesterday at 6,405.35, the first time since early December that it had closed above the 6,400 level, driven by a rally in oil prices after falls in the previous session.

A strike by oil workers in Kuwait had given crude a boost yesterday as it alleviated current oversupply issues after Monday’s disappointment that a production freeze had not been agreed by key producers at a weekend meeting.

Weak start: The Footsie eased back from yesterday’s four month peak in early trading, tracking overnight falls by Asian markets as oil prices retreated once again after a strike by oil workers in Kuwait was swiftly resolved

Weak start: The Footsie eased back from yesterday’s four month peak in early trading, tracking overnight falls by Asian markets as oil prices retreated once again after a strike by oil workers in Kuwait was swiftly resolved

But with that strike swiftly resolved, Brent crude fell back today, down 2 per cent to $43.12 a barrel in early London trading.

Tony Cross, Market Analyst at Trustnet Direct, said: ‘We’re seeing a little of yesterday’s solid gains being eroded on the FTSE-100 in early trade, and once again it’s oil that appears to be a key driver.

‘The employment strike in Kuwait that had helped drive crude higher at the start of the week has been called off, and it’s also worth bearing in mind that we’ve got oil options contracts expiring tomorrow, so this could drive some additional activity in the underlying prices.’

US stocks managed to post gains overnight, lifted by firmer energy stocks and a solid quarterly report from Johnson & Johnson.

But Asian markets took a tumble today in reaction to a reversal by the oil price, and as China growth concerns also resurfaced dragging Shanghai stocks 3.8 per cent lower.

Trustnet Direct’s Cross said: ‘Looking ahead, we’ve got UK unemployment data on the cards later this morning and given the fact we’re seeing what does seem to amount to some resurgent confidence in the domestic economy, anything that comes in better than forecast here could result in a degree of volatility.

‘This will be especially true if we see some reasonable wage growth as this – combined with a weak pound and the fact oil remains around the $40/barrel mark – could re-ignite inflation concerns. This would be a boost for the pound, but the news wouldn’t be cheered by exporters.’

Stocks in focus in London:

BHP BILLITON – The mining giant has followed rival Rio Tinto in trimming its iron ore output guidance, helping to ease pressure on an over supplied market.

ARM HOLDINGS – The chip designer, which supplies technology for Apple’s iPhone, has reported a 14 per cent rise in first quarter profit, outperforming a weak semiconductor market as its most advanced chips were used in an increasing number of smartphones.

METRO BANK – The challenger lender said its first quarter underlying loss after tax narrowed, driven by strong growth in residential mortgages and commercial lending.

N BROWN GROUP – The plus-size fashion retailer expects a hit of about £3million to its full year pretax profit, and said trading so far has been subdued.

RANDGOLD RESOURCES – The gold miner has entered a joint venture in the Democratic Republic of Congo with a company controlled by Israeli billionaire Dan Gertler and a state miner.

UK company news scheduled today includes:

Trading updates: ARM Holdings (Q1), BHP Billiton, Travis Perkins, GKN, Bunzl, RELX, Moneysupermarket.com, Rentokil Initial, Evraz, Hochschild Mining, Metro Bank, Virgin Money

Finals: N Brown Group, Highland Gold, Motif Bio, Flying Brands

Interims: Punch Taverns

Economic news scheduled today includes:

UK unemployment, average earnings at 9.30am

CBI industrial trends survey at 11am

US existing home sales at 3pm

US crude inventories at 3.30pm

 

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