LONDON (Alliance News) - It was a roller coaster afternoon for UK equities on Thursday, after better-than-expected US durable goods data heightened expectations for a US interest rate increase in June, prompting a volatile end to the day as the FTSE 100 eventually closed slightly higher.
The Commerce Department said durable goods orders shot up by 3.4% in April after climbing by an upwardly revised 1.9% in March. Economists had expected orders to rise by just 0.3% compared to the 0.8% increase that had been reported for the previous month.
The beat for durable goods orders was principally due to the sharp jump in orders for commercial aircraft and parts, which soared by 64.9%.
However, analysts said the commercial aircraft component is notoriously volatile and not indicative of underlying strength.
Excluding orders for transportation equipment, durable goods orders rose by a more modest 0.4% in April after inching up by 0.1% in March. The increase matched economist estimates.
Joshua Mahony, market analyst at IG, said the strong improvement in durable goods will be something the US Federal Reserve will be looking for to be able to act in June. "This doesn't mean [the Fed] will act in June, but certainly things like this certainly makes it more likely," said Mahony.
Following the data, the FTSE 100 sharply receded but the dollar was less moved. At the close of the London equity trading session the euro traded the dollar at USD1.1181 versus USD1.1161 at the close on Wednesday.
The pound was lower against the dollar at USD1.4680 at the close Thursday versus USD1.4711 at same time on Wednesday, as it was hit poor UK Gross Domestic Product and investment data earlier in the day.
The second estimate of first quarter UK GDP came in below the initial estimate, according to data from the Office for National Statistics. On a yearly basis, GDP climbed 2.0% in the first three months of 2016, below the 2.1% previously estimated.
Quarter-on-quarter GDP grew 0.4%, unrevised from the estimate published on April 27. The sequential growth was slower than the 0.6% expansion posted in the fourth quarter of 2015.
Another report by the ONS showed UK business investment decreased 0.5% quarter-on-quarter in the first quarter, coming below expectations for a 0.1% rise. However, the preliminary figure was an improvement on the 2.0% contraction seen in the fourth quarter of 2015.
The FTSE 100 closed up 2.80 points, at 6,265.65. Before the durable goods data, the blue-chip index was posting modestly higher gains, supported by stronger oil prices after Brent surpassed the USD50 a barrel mark. However, oil prices fell back below that threshold in the afternoon and by the London close, Brent traded at USD49.81 a barrel, still higher than the USD49.17 seen at the close on Wednesday.
The price of gold also fell, trading at USD1,222.30 an ounce at the London stock market close, versus USD1,222.95 on Wednesday.
The FTSE 250 ended down 0.2%, or 39.81 points, at 17,192.83 and the AIM All-Share closed up 0.1%, or 0.88 point, at 734.38.
European stocks outperformed London with the CAC 40 in Paris and the DAX 30 in Frankfurt both rising 0.7%.
At the London close on Wall Street, the Dow 30 was down 0.1%, while the S&P 500 and Nasdaq Composite were both flat.
On the London Stock Exchange, United Utilities Group said profit fell in line with its expectations in its recent financial year, but revenue grew and the water group said it is well positioned for the current regulatory period.
The FTSE 100 utility said its operating profit for the year to the end of March was GBP567.9 million, down 13% from GBP653.3 million. United Utilities will pay a total dividend for the year of 38.45 pence, compared to 37.70p a year earlier.
Underlying operating profit was GBP604.1 million, down 9.1% from GBP664.3 million and in line with the company's expectations amid new regulated price controls imposed on the water industry. The stock ended down 1.1%.
Life insurers were amongst the heaviest fallers in the FTSE 100 after the UK Financial Conduct Authority tabled plans to cap early-exit charges for consumers exiting pension plans at 1.0% of the value of their pot, while banning such charges entirely for new pension contracts.
The City regulator said the cap will apply to existing contract-based personal pensions, including workplace personal pensions. Firms will not be able to apply any exit charge for personal pensions contracts entered after the proposed rules come into force.
Prudential ended down 1.2% and Aviva down 0.9%.
Ibstock was the worst performer in the FTSE 250, down 8.5%. The bricks manufacturer said it has seen good trading momentum in the first four months of 2016, but its UK clay business made a slower start to the year than expected.
UK brick sales to the new residential sector grew, Ibstock said, but the UK clay business was hit by destocking in the builders' merchant supply chain, itself driven by softness in the repair, maintenance and improvement market. This has improved, Ibstock said, but a shift in its sales mix in the first four months will mean overall average pricing will take a hit.
On the other side of the index, Pets at Home Group reported growth in profit in its recently ended financial year as revenue grew in both the merchandise and services divisions, and it said trading is in line with expectations in the first quarter of the new year.
The retailer for pets and veterinary services operator said its pretax profit in the year ended March 31 grew to GBP92.1 million from GBP87.0 million the year before, as revenue rose to GBP793.1 million from GBP729.1 million.
Pets at Home Group will pay a total dividend for the year of 7.5 pence, a 39% increase on the prior year. The stock closed as the best performer in the FTSE 250, up 4.9%.
The main events in the economic calendar Friday will be from the US. The second reading of first quarter US GDP is at 1330 BST, at the same time as personal consumption expenditure. The Reuters/Michigan consumer sentiment index is at 1500 BST. Federal Reserve Chair Janet Yellen's speech at 1530 BST will be of key interest for investors as they look for more hints for when the next US interest rate hike will be.
The UK corporate calendar is considerably thinner than recent days. Specialty chemicals company Bodycote issues a trading statement, as does regional commercial property investor Regional REIT. There are also full-year results from car dealer Caffyns, telecommunications company KCOM Group and port reception facilities and waste treatment company Nature Group.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
Copyright 2016 Alliance News Limited. All Rights Reserved.
UK dividends calendar - next 7 days
Monday 27 May | |
no events scheduled | |
Tuesday 28 May | |
Atrato Onsite Energy PLC | dividend payment date |
Chesnara PLC | dividend payment date |
Costain Group PLC | dividend payment date |
CQS Natural Resources Growth & Income PLC | dividend payment date |
Foxtons Group PLC | dividend payment date |
Quilter PLC | dividend payment date |
Team Internet Group PLC | dividend payment date |
Tetragon Financial Group Ltd | dividend payment date |
Wednesday 29 May | |
Fresnillo PLC | dividend payment date |
Mortgage Advice Bureau Holdings PLC | dividend payment date |
Seplat Energy PLC | special dividend payment date |
Stelrad Group PLC | dividend payment date |
Tyman PLC | dividend payment date |
Wheaton Precious Metals Corp | ex-dividend payment date |
Thursday 30 May | |
Advanced Medical Solutions Group PLC | ex-dividend payment date |
Alfa Financial Software Holdings PLC | ex-dividend payment date |
Alfa Financial Software Holdings PLC | special dividend payment date |
Alliance Trust PLC | ex-dividend payment date |
Anexo Group PLC | ex-dividend payment date |
Associated British Foods PLC | ex-dividend payment date |
Baillie Gifford Shin Nippon PLC | dividend payment date |
BlackRock World Mining Trust PLC | ex-dividend payment date |
British Smaller Cos VCT2 PLC | ex-dividend payment date |
Britvic PLC | ex-dividend payment date |
Canadian General Investments Ltd | ex-dividend payment date |
Card Factory PLC | ex-dividend payment date |
Centamin PLC | ex-dividend payment date |
Centrica PLC | ex-dividend payment date |
Cerillion PLC | ex-dividend payment date |
Coats Group PLC | dividend payment date |
Coca-Cola HBC AG | ex-dividend payment date |
DFS Furniture PLC | dividend payment date |
Dowlais Group PLC | dividend payment date |
Downing Renewables & Infrastructure Trust PLC | ex-dividend payment date |
Fair Oaks Income Ltd | ex-dividend payment date |
Fair Oaks Income Ltd Realisation | ex-dividend payment date |
Gamma Communications PLC | ex-dividend payment date |
Great Portland Estates PLC | ex-dividend payment date |
H&T Group PLC | ex-dividend payment date |
Henderson EuroTrust PLC | ex-dividend payment date |
Hill & Smith PLC | ex-dividend payment date |
Hilton Food Group PLC | ex-dividend payment date |
Intertek Group PLC | ex-dividend payment date |
JPMorgan European Growth & Income PLC | ex-dividend payment date |
JPMorgan Global Growth & Income PLC | ex-dividend payment date |
JTC PLC | ex-dividend payment date |
Keller Group PLC | ex-dividend payment date |
Law Debenture Corp PLC | ex-dividend payment date |
Likewise Group PLC | ex-dividend payment date |
LMS Capital PLC | ex-dividend payment date |
Macfarlane Group PLC | dividend payment date |
Marks & Spencer Group PLC | ex-dividend payment date |
Mobeus Income & Growth 2 VCT PLC | ex-dividend payment date |
Octopus AIM VCT 2 PLC | ex-dividend payment date |
Octopus Titan VCT PLC | dividend payment date |
On the Beach Group PLC | ex-dividend payment date |
Origin Enterprises PLC | ex-dividend payment date |
PetroTal Corp | ex-dividend payment date |
Premier Miton Global Renewables Trust PLC | ex-dividend payment date |
Regional REIT Ltd | ex-dividend payment date |
Sage Group PLC | ex-dividend payment date |
Seplat Energy PLC | ex-dividend payment date |
Severn Trent PLC | ex-dividend payment date |
Temple Bar Investment Trust PLC | ex-dividend payment date |
Triple Point Social Housing REIT PLC | ex-dividend payment date |
Ultimate Products PLC | ex-dividend payment date |
Vanquis Banking Group PLC | dividend payment date |
Victrex PLC | ex-dividend payment date |
Yu Group PLC | ex-dividend payment date |
Friday 31 May | |
abrdn Property Income Trust Ltd | dividend payment date |
Albion Development VCT PLC | dividend payment date |
Alternative Income REIT PLC | dividend payment date |
Arbuthnot Banking Group PLC | dividend payment date |
Balanced Commercial Property Trust Ltd | dividend payment date |
Bankers Investment Trust PLC | dividend payment date |
Bellevue Healthcare Trust PLC | dividend payment date |
City of London Investment Trust PLC | dividend payment date |
CQS New City High Yield Fund Ltd | dividend payment date |
Custodian Property Income REIT PLC | special dividend payment date |
CVC Income & Growth Ltd EURO | dividend payment date |
CVC Income & Growth Ltd GBP | dividend payment date |
Derwent London PLC | dividend payment date |
Diverse Income Trust PLC | dividend payment date |
Dunedin Income Growth Investment Trust PLC | dividend payment date |
Ecofin Global Utilities & Infrastructure Trust PLC | dividend payment date |
EJF Investments Ltd | dividend payment date |
Elementis PLC | dividend payment date |
Global Opportunities Trust PLC | dividend payment date |
Greencoat UK Wind PLC | dividend payment date |
Henderson Far East Income Ltd | dividend payment date |
Henderson International Income Trust PLC | dividend payment date |
Henry Boot PLC | dividend payment date |
Ibstock PLC | dividend payment date |
IWG PLC | dividend payment date |
JPMorgan American Investment Trust PLC | dividend payment date |
JPMorgan Global Core Real Assets Ltd | dividend payment date |
Kier Group PLC | dividend payment date |
Marwyn Value Investors Ltd | dividend payment date |
Mobeus Income & Growth VCT PLC | dividend payment date |
NB Global Monthly Income Fund Ltd | dividend payment date |
Octopus Renewables Infrastructure Trust PLC | dividend payment date |
Picton Property Income Ltd | dividend payment date |
Portmeirion Group PLC | dividend payment date |
PPHE Hotel Group Ltd | dividend payment date |
PRS REIT PLC | dividend payment date |
Reach PLC | dividend payment date |
Robert Walters PLC | dividend payment date |
Senior PLC | dividend payment date |
Shaftesbury Capital PLC | dividend payment date |
Sherborne Investors (Guernsey) C Ltd | dividend payment date |
STV Group PLC | dividend payment date |
Target Healthcare REIT PLC | dividend payment date |
Taylor Maritime Investments Ltd | dividend payment date |
TwentyFour Select Monthly Income Fund Ltd | dividend payment date |
Vesuvius PLC | dividend payment date |
Weir Group PLC | dividend payment date |
Comments and questions to newsroom@alliancenews.com | |
A full 14-day events calendar is provided each day with a subscription to Alliance News UK Professional. | |
Copyright 2024 Alliance News Ltd. All Rights Reserved. |