LONDON (Alliance News) - London stocks opened lower Friday, with Whitbread shares sold after a downgrade by Barclays, but with Berkeley Group leading the gainers after it announced a boost to its dividend programme, even though reporting a fall in pretax profit.
Shares in the UK were adding to the losses seen on Thursday after the European Central Bank announced further monetary easing measures that disappointed analysts, who were expecting a much more significant move by the ECB to fight against deflationary pressure and boost the eurozone economy.
The FTSE 100 index opened down 0.4% at 6,252.54 points, the FTSE 250 down 0.2% at 17,354.56 and the AIM All-Share down 0.1% at 740.66.
Berkeley Group Holdings was the best blue-chip performer, up 5.9%. The housebuilder, which almost exclusively focuses on more-expensive developments in London and the South East of England, said its pretax profit fell to GBP293.3 million in the six months to the end of October from GBP304.9 million a year before, primarily due to the one-off gain made a year earlier from the sale of ground rent assets.
Adjusted pretax profit, which strips out the one-off profit from the ground rent sale, rose to GBP242.3 million, up 10% from GBP219.8 million the year earlier, however, as revenue for the group rose to GBP1.14 billion from GBP304.9 billion.
The group said underlying demand in its markets remains robust and the operating environment is still stable and, illustrating its confidence on its outlook, said it would hike it dividend return programme to the tune of GBP500.0 million, with the target of returning GBP16.34 per share in total to shareholders by the end of September 2021.
This is increased from GBP13.00 per share previously and means its dividend payout through to September 21, 2016 from now will be 200.00 pence per share, up from 144p.
Analysts at Davy Research said Berkeley Group results were "broadly in line with expectations".
At the other end of the index, Whitbread was down 1.9% after being downgraded by Barclays to Equal Weight From Overweight. The owner of hotel chain Premier Inn and coffee shops Costa Coffee ended Thursday among a handful of gainers, up 2.1%, benefiting from a price target lift from Credit Suisse.
Meanwhile, satellite communications company Inmarsat was down 1.2% after being cut to Neutral from Buy by Citigroup.
In the FTSE 250, Hunting was adding 1.8% after Liberum upgraded the oil company to Hold from Sell, while aerospace and defence manufacturer Cobham was down 1.7% after being downgraded to Sell from Hold by Deutsche Bank.
In Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were higher, though recovering little of the ground lost on Thursday, both up 0.2%.
The ECB cut on Thursday its deposit rate by 10 basis points, deeper into negative territory, to -0.30%. The size of the reduction was at the lower end of the 10-20 basis points cut economists had forecast. Following its monetary policy meeting held in Frankfurt, the Governing Council left the main refinancing rate unchanged at a record low of 0.05% and the marginal lending facility rate at 0.30%.
During the press conference after the meeting, ECB President Mario Draghi announced that the central bank's EUR1.1 trillion asset purchase programme will be extended until March 2017, "or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its aim of achieving inflation rates below, but close to, 2% over the medium term."
The ECB left the size of the monthly asset purchases unchanged at EUR60 billion, contrary to economists' expectations for a boost to as much as EUR80 billion.
With the next Fed monetary policy meeting in investors minds, US nonfarm payrolls data, expected at 1330 GMT, are likely to grab attention. Following October's very strong report, when it added 271,000, Lloyds Bank said the consensus expectation is for a rise of 200,000 in November payrolls.
"With the Federal Open Market Committee now seemingly eager to pull the trigger, it will probably require an outturn well below expectations, possibly less than 100,000, to delay a December lift-off," said Rhys Herbert, senior economist at Lloyds Bank. The next Fed meeting is scheduled for December 15-16.
Wall Street also ended lower Thursday, with the DJIA and the S&P 500 down 1.4% and the Nasdaq Composite down 1.7%.
In China, the Shanghai Composite index ended down 1.7% Friday, while the Hang Seng in Hong Kong closed down 0.8%.
Meanwhile, the Japanese Nikkei 225 index closed down 2.2% even though the country's consumer confidence strengthened by more than expected in November to the strongest level in two years, survey data from the Cabinet Office showed Friday.
The consumer confidence index rose to 42.6 in November from 41.5 in the previous month. Economists had expected the index to increase slightly to 41.7. The latest reading was the highest since November 2013, when it marked 43.0.
Germany's factory orders recovered at a faster than expected pace in October, data from Destatis revealed Friday. Factory orders increased 1.8% in October from the previous month, reversing a revised 0.7% fall in September. Economists had forecast a 1.2% rise for October. The decline for September was revised from an initially estimated decrease of 1.7%.
By Daniel Ruiz; danielruiz@alliancenews.com
Copyright 2015 Alliance News Limited. All Rights Reserved.
