LONDON (Alliance News) - London shares are mixed Wednesday mid-morning, as the pound dropped after UK jobless claims increased in June, while mining stocks are pushing higher on the back of reassuring economy growth figures from China.
The FTSE 100 is flat at 6,750.88, the FTSE 250 is down 0.2% at 17,605.12, and the AIM All-Share is flat at 755.22.
In Europe, the CAC 40 in Paris is up 0.1% and the DAX 30 in Frankfurt is up 0.2%.
UK jobless claims increased unexpectedly in June, data from the Office for National Statistics showed Wednesday. The number of people claiming jobseeker's allowance increased by 7,000 in June from May, confounding expectations for a decline of 9,000. This was the first increase since October 2012.
During March to May, the jobless rate came in at 5.6%, up from 5.5% in the three months to February but lower than 6.5% seen in the same period a year earlier, the statistical office said. There were 1.85 million unemployed people in three months to May. This was 15,000 more than for the three months to February, the first quarterly increase since January to March 2013.
Pay for employees including bonuses increased by 3.2% in three months to May and that excluding bonuses by 2.8%.
The data comes a day after Bank of England's Governor Mark Carney said that "the point at which interest rates may begin to rise is moving closer, given the performance of the economy," suggesting that the UK central bank soon could start to normalise UK monetary policy.
Following the release of the data, the pound dropped to USD1.5601 but has recovered some ground since and now stands at USD1.5624.
Meanwhile, efforts to pass tough austerity measures were set to dominate in Greece's Parliament Wednesday as leaders worked to secure a new bailout designed to keep the country out of bankruptcy. But the way ahead for the legislation was anything but smooth, with strenuous legislative opposition expected against the backdrop of mounting rancour among Greek citizens. Labour unions were set to begin 24-hour strikes, while political factions planned demonstrations across the country.
The bill, which was presented in Parliament Tuesday, was drawn up based on creditors' demands after a crucial eurozone summit where a preliminary agreement was reached in which the reforms were promised in exchange for the country's third bailout, worth up to EUR86 billion. The law is expected to be adopted, with the backing of pro-European opposition parties as well as the ruling SYRIZA - even though some of the ruling party's lawmakers are expected to defect.
The measures include streamlining Greece's value-added tax system, reforming its pension system and safeguarding the independence of the national statistics office ELSTAT.
On the London Stock Exchange, Travis Perkins is up 1.4% to 2,195 pence after Berenberg upgraded the building materials company to Buy from Hold, lifting its price target to 2,500p from 2,000p. Meanwhile, peer Wolseley is up 1.0% at 4,301p, after Berenberg raised its price target to 4,600p from 4,300 keeping a Buy stance.
Mining stocks in London are higher after China's economy grew in the second quarter of this year by 7% year-on-year, the National Bureau of Statistics announced, slightly outpacing predictions. Growth also had been 7% in the previous quarter, according to the authority. Analysts had expected a slightly weaker growth of 6.9% for the second quarter.
Quarter-on-quarter, the Chinese economy expanded 1.7% in three months to June after growing 1.4% in the first quarter. The growth rate was forecast to improve to 1.6%. Similarly, retail sales growth quickened to 10.6% in June from 10.1% a month ago. It was slightly above the forecast of 10.3%. Fixed asset investment for the first half of the year advanced 11.4%.
Anglo American, up 1.8%, Fresnillo, up 1.4%, Rio Tinto, up 1.0%, Glencore, up 1.0%, and Antofagasta, up 0.5%, are amongst the best blue-chip performers in London. In the FTSE 250, Lonmin is up 4.2% and Kaz Minerals is up 3.9%.
Burberry Group is down 1.7% after the fashion retailer warned Wednesday about a challenging market in Hong Kong and "a more adverse geographic mix". The company said retail revenue grew 10% to GBP407 million in the three months to June 30, as it experienced double-digit growth in Europe, the Middle East, India and Africa, high single-digit growth in the Americas, but a low single-digit decline in Asia Pacific.
"Admittedly, the situation in the Asia Pacific region remains mixed, particularly in Hong Kong where trading is under pressure," says Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers. However, "the currency headwinds have improved, the company continues to refine its retail store portfolio to maximise selling opportunities, whilst its digital presence goes from strength to strength," he adds.
JD Wetherspoon is down 6.5% after it reported a rise in revenue in the 50 weeks to July 12, but reaffirmed that pretax profit for the full year is unlikely to be higher than the prior year. The pub company said that total sales increased 6.5% in the 11 weeks to July 12 and 7.6% in the 50 weeks to the same date, growing 2.9% and 3.4% on a like-for-like basis, respectively.
Still in the economic calendar, in the US, industrial production is due at 1415 BST, while the US producer prices index is due at 1430 BST. US Fed Chair Janet Yellen is due to give a speech in the Semiannual Monetary Policy Report to the US Congress at 1500 BST. EIA Crude Oil Stocks are due at 1530 BST. The Fed's Beige Book is due at 1900 BST.
By Daniel Ruiz; danielruiz@alliancenews.com
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