London close: UK stocks finish flat as retailers fall, data comes in mixed

London's FTSE 100 ended Tuesday's session more or less where it started with stocks in the retail sector limiting gains while investors digested a string of important economic data.

A disappointing third-quarter update from Kingfisher saw shares in the DIY retailer slump, while the supermarket sector was under pressure after Tesco shareholders launched legal action following a recent accounting scandal.

Oil and mining stocks were also providing a drag on the FTSE 100, with the blue-chip index finishing just 0.02% higher at 6,731.

Earlier gains across Europe - sparked by ongoing speculation about monetary easing by the European Central Bank - were erased by the close of trade after some mixed economic indicators from the States.

Annualised US gross domestic product (GDP) growth for the third quarter was revised higher to 3.9%, up from the initial estimate of 3.5%, surprising analysts who had expected a downwards revision to 3.3%.

The upside surprise is "another reason to expect the Fed to begin normalising interest rates sooner than expected next year", according to analysts at Capital Economics who predict the Federal Reserve will start hiking rates in March 2015.

However, sentiment was dampened by the data which showed that US consumer confidence unexpectedly tumbled in November, while annual US house-price inflation eased to its slowest pace in two years in September.

Earlier in the session, figures showed that Germany avoided recession with the economy expanding by 0.1% in the third quarter, while UK mortgage approvals dropped to a 17-month low in October.

Retailers under pressure

Shares in Kingfisher declined after the B&Q and Screwfix owner saw like-for-like sales fall in the third quarter as decent growth in the UK and Ireland was offset by falling sales in its largest market, France.

Tesco was feeling the heat from its indignant shareholders in response to a recent accounting scandal that left a £263m black hole in its accounts. A law firm claimed that shareholders are entitled to compensation for losses caused by the overstating of earnings. Grocery rivals J Sainsbury and Wm Morrison were also under the weather.

Oil producers such as BP, Tullow Oil and Shell were lower as crude prices declined for the second straight day ahead of Thursday's OPEC meeting. Prices recently hit a four-year low on concerns that OPEC won't issue a cut in production.

Mining stocks were also mostly weaker as shares continued to retreat after a China-inspired rally last week as the country's central bank unexpectedly lowered interest rates. Anglo American and BHP Billiton both fell.

Meanwhile, media stocks were putting in a decent performance with Sky, Reed Elsevier and ITV rising strongly. ITV was helped by comments from Goldman Sachs which reiterated its 'buy' rating on the stock due to an "attractive" valuation.

BT was continuing to rise on speculation that it could buy UK mobile operator O2 from Telefonica. Spanish newspaper El Confidencial reported BT could offer at least €6bn (£4.76bn) on top of a 20% stake in its share capital for the company it originally spun off in 2001.

Market Movers

techMARK 2,910.08 +0.26%
FTSE 100 6,731.14 +0.02%
FTSE 250 15,831.55 +0.77%

FTSE 100 - Risers
Sky (SKY) 918.00p +2.57%
Royal Bank of Scotland Group (RBS) 387.10p +2.16%
ITV (ITV) 209.20p +2.05%
Reed Elsevier (REL) 1,095.00p +1.96%
Associated British Foods (ABF) 3,109.00p +1.83%
Schroders (SDR) 2,662.00p +1.80%
Next (NXT) 6,865.00p +1.63%
BAE Systems (BA.) 472.50p +1.57%
GKN (GKN) 340.30p +1.55%
Petrofac Ltd. (PFC) 891.00p +1.54%

FTSE 100 - Fallers
Sainsbury (J) (SBRY) 241.40p -4.32%
Kingfisher (KGF) 291.30p -4.11%
Morrison (Wm) Supermarkets (MRW) 181.10p -3.16%
Tesco (TSCO) 188.15p -2.71%
Babcock International Group (BAB) 1,152.00p -2.62%
Anglo American (AAL) 1,329.50p -1.81%
BHP Billiton (BLT) 1,593.50p -1.70%
Dixons Carphone (DC.) 419.80p -1.57%
Smith & Nephew (SN.) 1,123.00p -1.32%
BG Group (BG.) 1,050.50p -1.08%

FTSE 250 - Risers
Balfour Beatty (BBY) 176.80p +8.40%
Mitchells & Butlers (MAB) 376.10p +7.76%
Paragon Group Of Companies (PAG) 406.90p +7.67%
Infinis Energy (INFI) 229.80p +6.39%
Petra Diamonds Ltd.(DI) (PDL) 206.30p +6.01%
Evraz (EVR) 162.60p +5.72%
Stock Spirits Group (STCK) 258.90p +4.73%
Greencore Group (GNC) 272.10p +4.57%
Serco Group (SRP) 175.20p +4.41%
Bodycote (BOY) 630.00p +4.05%

FTSE 250 - Fallers
Centamin (DI) (CEY) 49.23p -6.58%
Zoopla Property Group (WI) (ZPLA) 178.60p -6.00%
EnQuest (ENQ) 66.60p -4.24%
Premier Oil (PMO) 228.40p -4.03%
Spirent Communications (SPT) 66.45p -3.90%
Rightmove (RMV) 2,243.00p -3.40%
Afren (AFR) 67.15p -3.10%
TSB Banking Group (TSB) 262.40p -3.07%
Spire Healthcare Group (SPI) 326.70p -3.06%
Card Factory (CARD) 242.10p -3.04%