LONDON MARKET OPEN: Stocks Down But Whitbread Gains As Sales Grow

LONDON (Alliance News) - Stocks in the UK were lower after the open Tuesday, giving back some of the gains made Monday, but Whitbread was in favour after giving a positive trading update.

The FTSE 100 index was down 0.4%, or 21.12 points, at 6,182.88. The FTSE 250 was down 0.5% at 16,879.31 and the AIM All-Share was off 0.1% at 721.33.

The best performer among the few gainers in the blue-chip index was Whitbread, up 2.8%, after it reported growth in sales in the first quarter of its financial year and said it is confident of making good progress in the full year.

The owner of the Premier Inn hotel chain and Costa coffee shop brand said total sales in the 13 weeks ended June 2 grew by 8.0% on the same period the year before, as like-for-like sales rose by 1.8%. At Premier Inn, total sales were also up 8.0% and like-for-likes were up 2.1%, while Costa saw total sales growth of 12% as like-for-likes increased by 2.6%.

Whitbread said the hotel market has continued to be soft in the UK, but Premier Inn benefited from its hotel extension programme. Revenue per available room declined by 1.2% as a result of the soft market environment. Premier Inn plans to open 4,000 to 4,500 new hotel rooms in the current financial year.

Meanwhile, housebuilders were among the biggest decliners in the FTSE 100, giving back some of ground gained Monday as the chances of Brexit seemed to recede, with Berkeley Group of Holdings down 2.0% and Persimmon down 1.6%.

Miners also were in the red, with Anglo American down 3.1% and Rio Tinto down 1.7%.

In the FTSE 250, Circassia Pharmaceuticals was up 7.7%, the best mid-cap performer, recovering some ground following a big fall on Monday. Circassia fell 66% on Monday after it said a late-stage study of its key cat allergy treatment failed to achieve its primary endpoint, as the treatment and a placebo used in the study proved equally effective.

At the other end of the mid-cap index, Senior was down 12%. The components and systems manufacturer said its Aerospace arm is trading in line with expectations, but its Flexonics business is continuing to face tough market conditions.

Senior said the Aerospace business has seen activity increase in line with its forecasts, boosted by additional work on new aircraft. Margins for the unit, however, will be lower in the first half of 2016 as the ramp-up on new aircraft production programmes continues.

For Flexonics, which makes expansion joints, flexible metal and teflon hoses and cryogenic equipment for pressure and piping systems, trading has continued to be weighed down by weak conditions in the truck and off-highway sector and ongoing softness in the oil and gas market.

Unlike London's stock indices, the pound continued its rally against the dollar. Sterling was quoted at USD1.4728 after the open, having touched a high of USD1.4745, compared to the USD1.4689 at the London equities close on Monday.

Billionaire currency trader George Soros has warned a vote to Leave the EU will trigger a plunge in the pound greater than Black Wednesday - but without the benefits seen after the crisis that made him a fortune.

In Europe, the CAC 40 in Paris was down 0.4%, while the DAX 30 in Frankfurt was off 0.2%.

In Asia on Tuesday, the Japanese Nikkei 225 index ended up 1.3%. Members of the Bank of Japan's monetary policy board said that the country's overall economic recovery was unaffected by recent weak data, minutes from the bank's April 27 and 28 meeting revealed.

In China, the Shanghai Composite fell 0.4%, while the Hang Seng index in Hong Kong is adding 0.4%.

In the economic calendar Tuesday, UK public sector net borrowing is due at 0930 BST. Also in the economic calendar Tuesday, Germany's ZEW survey of economic sentiment is at 1000 BST, and the UK's CBI industrial trends survey is at 1100 BST. In the US, the Redbook index is at 1355 BST, while API crude oil stock data are at 2130 BST.

After the London equities close, Federal Reserve Chair Janet Yellen will address the Senate Banking Committee at its "Semiannual Monetary Policy Report to the Congress" hearing at 1930 BST.

By Daniel Ruiz; danielruiz@alliancenews.com

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