London close: Stocks fall as ECB leaves policy unchanged

London stocks finished lower on Thursday as traders weighed worse-than-expected UK retail sales data and the European Central Bank’s policy announcement.

UK retail sales dropped 1.3% in March compared with February, which was much steeper than the 0.1% forecast by economists, the Office for National Statistics said.

On the year, retail sales were up 2.7%, missing expectations for a 4.4% increase.

“Any number of factors could be to blame, from bad weather to poor employment figures, along with the reality that wage growth remains stagnant,” said Dennis de Jong, managing director at UFX.com.

“Consumers may also be nervous about an uncertain Brexit outcome, ensuring they keep a tight hold on their wallets. Mark Carney and his BoE colleagues will be hopeful that the pending arrival of summer will prompt the masses to hit the high street, and drive those numbers back up.”

ECB leaves policy unchanged

The European Central Bank left its policy unchanged on Thursday, as expected by economists, a month after introducing a comprehensive package of new measures.

The ECB held interest rates at 0.0%, the deposit facility rate at -0.40% and the marginal lending facility rate at 0.25%. The Governing Council also kept the asset purchase programme at €80bn per month.

In a press conference following the announcement, President Mario Draghi was forced to defend low interest rates as reporters questioned him about criticism from German officials.

German Finance Minister Wolfgang Schaeuble has said low interest rates for a long period of time was "not reasonable” and that the central bank’s measures were causing “extraordinary problems” for Europe’s biggest economy. Schaeuble said Germans were concerned that low interest rates were hurting savers' finances and pensioners’ plans.

Draghi responded to the claims by saying the ECB has a mandate to pursue price stability for the whole of the Eurozone not only for Germany.

“While the lack of any additional goodies from the ECB’s table led to some initial disappointment in markets, this was swiftly countered by a realisation that his comments continue to reinforce the idea that the central bank is in no rush whatsoever to abandon its loose policy stance, whatever the Germans might want,” IG senior analyst Chris Beauchamp said.

US data

The number of Americans filing for unemployment benefits unexpectedly fell last week, to the lowest level since November 1973, according to data from the Labor Department.

US initial jobless claims fell by 6,000 to 247,000 from the previous week’s unrevised level of 253,000, versus expectations for a rise 263,000.

The latest report from the Federal Reserve Bank of Philadelphia showed manufacturing conditions in the region deteriorated a lot more than expected in April.

The diffusion index for current activity tumbled to -1.6 from 12.4 in March, versus economists’ expectations for a slip to 8.9.

The Federal Reserve Bank of Chicago revealed economic activity slowed in March. The national economy activity index fell from -0.44 in February to a reading of -0.38 last month.

Meanwhile, oil prices declined as senior energy official Mehdi Hosseini from Iran's Petroleum Ministry said on Thursday that Iran won’t consider a production freeze until it reaches its pre-sanctions level of output of 4.2m barrels a day.

Brent crude fell 1.5% to $45.12 per barrel and West Texas Intermediate dipped 1.3% to $43.60 per barrel at 1653 BST.

Companies

Sky’s shares fell after the broadcaster reported a slowdown in the number of new TV customers in the three months to the end of March.

Equipment rental group Ashtead advanced after saying it has performed well in the fourth quarter, and was expecting full-year results to be towards the top end of current analyst expectations.

Acacia Mining jumped after it reported better first-quarter gold production than forecast and a 24% rise in earnings before interest tax, depreciation and amortisation to $66m that almost hit targets thanks to an increase in revenue and lower cash costs.

Pets at Home rallied after a year-end trading statement showed like-for-like sales growth increased in the fourth quarter, with profits for the full year expected to meet forecasts.

Anglo American dropped as it reiterated its full-year production guidance and reported lower first-quarter output for diamonds, iron ore and export coal, but higher output in platinum and nickel.

Market Movers

FTSE 100 (UKX) 6,381.44 -0.45%
FTSE 250 (MCX) 16,979.44 -0.23%
techMARK (TASX) 3,153.29 -0.22%

FTSE 100 - Risers

Ashtead Group (AHT) 892.00p 3.78%
Shire Plc (SHP) 4,317.00p 3.06%
Taylor Wimpey (TW.) 176.80p 1.90%
Tesco (TSCO) 185.40p 1.87%
HSBC Holdings (HSBA) 473.05p 1.64%
Royal Bank of Scotland Group (RBS) 253.60p 1.64%
Lloyds Banking Group (LLOY) 68.70p 1.39%
Johnson Matthey (JMAT) 2,939.00p 1.38%
BP (BP.) 368.55p 1.35%
Royal Dutch Shell 'B' (RDSB) 1,843.50p 1.29%

FTSE 100 - Fallers

Anglo American (AAL) 747.30p -5.64%
Sky (SKY) 985.00p -4.18%
Sage Group (SGE) 604.50p -3.67%
National Grid (NG.) 969.70p -3.13%
Associated British Foods (ABF) 3,227.00p -3.09%
Antofagasta (ANTO) 485.00p -3.00%
Capita (CPI) 1,018.00p -2.96%
Mondi (MNDI) 1,316.00p -2.73%
Informa (INF) 666.00p -2.70%
Relx plc (REL) 1,262.00p -2.62%

FTSE 250 - Risers

Senior (SNR) 237.00p 6.14%
Acacia Mining (ACA) 336.70p 5.38%
Rotork (ROR) 187.20p 5.17%
Zoopla Property Group (WI) (ZPLA) 291.30p 4.30%
Smiths Group (SMIN) 1,154.00p 4.15%
IP Group (IPO) 178.90p 3.89%
Cairn Energy (CNE) 212.00p 3.47%
Pets at Home Group (PETS) 247.60p 3.30%
Virgin Money Holdings (UK) (VM.) 352.30p 3.25%
Genus (GNS) 1,598.00p 2.70%

FTSE 250 - Fallers

NMC Health (NMC) 1,062.00p -3.54%
Hansteen Holdings (HSTN) 102.30p -3.49%
Ted Baker (TED) 2,279.00p -3.43%
Spire Healthcare Group (SPI) 328.00p -3.30%
Auto Trader Group (AUTO) 366.20p -3.30%
Pendragon (PDG) 34.14p -3.04%
Greggs (GRG) 1,046.00p -2.61%
Allied Minds (ALM) 400.00p -2.56%
Moneysupermarket.com Group (MONY) 314.20p -2.54%
Brewin Dolphin Holdings (BRW) 277.30p -2.29%