London close: Stocks edge lower despite China CPI, oil price recovery

London stocks finished slightly lower on Wednesday despite data showing an improvement in Chinese inflation and a bounce in oil prices.

The Footsie ended the day down by 8.54 points to 6,126.68.

China’s consumer price index rose 1.5% last month from a year earlier, according to the National Bureau of Statistics, compared to analysts’ estimates of 1.4% and October’s 1.3%. The increase was boosted by a rise in food and services prices.

“While there is no disputing that the China economy is slowing down, this release at least provides optimism that the multiple measures taken by both the PBoC and Beijing to uplift the economy have had some sort of positive impact on inflation,” said FXTM research analyst Lukman Otunuga.

China producer prices fell 5.9% in November from a year ago, less than the 6% decrease expected and following a 5.9% drop in October.

Meanwhile China set the yuan at 6.414 to the US dollar on Wednesday, its weakest level since August 2011, as the nation tackles currency outflows and an economic slowdown.

In a boost to the market, oil prices rebounded with Brent rising 1.03% to $40.68 per barrel and West Texas Intermediate increasing 1.1% to $37.93 per barrel at 1622 GMT.

“Coming off the back of today’s US dollar weakness and a rebound in UK commodity stocks, this afternoon’s spike in crude prices is a welcome reprieve for indices that are following oil prices higher,” said IG analyst Josh Mahony.

Closer to home, the Bank of England warned of volatility of capital flows if the US Federal Reserve raises interest rates next week. The Fed is widely expected to raise rates. The record of the BoE’s Financial Policy Committee meeting in November said: “Capital flows had been sensitive to diverging prospects for monetary policy around the world and there was a risk of further volatility in capital flows as that policy divergence progressed.”

In the Eurozone, German exports fell 1.2% month-on-month in October, worse than the 0.6% drop forecast by analysts and after a 2.6% increase in September. Imports declined 3.4% in October, compared to analysts’ estimates for a 1% decrease and the previous month’s 3.8% increase.

Across the Atlantic, wholesale inventories in the US declined 0.1% compared with analysts’ expectations for a 0.1% gain, according to the Commerce Department.

The Mortgage Bankers Association said its seasonally adjusted index of US mortgage application activity, which covers home purchase demand and refinancing demand, climbed 1.2% in the week ended 4 December.

On the company front, Ashtead jumped after the equipment hire group upgraded its guidance as it reported solid gains in first half revenue and profit.

Anglo American slid for a second day after it said on Tuesday that it plans to scrap its dividend for this year and the next and axe jobs amid a “radical” portfolio restructuring to combat falling commodity prices. Jefferies downgraded its stance on the stock to ‘underperform’ from ‘hold’ and took an axe to the target price, chopping it to 275p from 635p.

Pearson was also under the cosh after Deutsche Bank cut its price target on the stock to 770p from 950p.

Rio Tinto bounced back a day after announcing it was cutting capital spending to shore up its balance sheet amid a slump in commodity prices.

Stagecoach plunged as it said the Paris terror attacks in November has discouraged people from travelling and led the company to slightly revise full year earnings downwards.

FirstGroup advanced after the company said it would continue to operate the Trans Pennie franchise until at least 2023.

Entertainment One gained as it confirmed that the company continues to trade in line with full year underlying earnings expectations, as it responded to recent weakness in its share price. The stock has been under pressure since the company announced a refinancing deal that will increase its interest payments.

Market Movers

FTSE 100 (UKX) 6,136.24 0.02%
FTSE 250 (MCX) 17,153.58 -0.22%
techMARK (TASX) 3,175.77 -0.28%

FTSE 100 - Risers

Ashtead Group (AHT) 1,120.00p 8.63%
Glencore (GLEN) 83.44p 5.02%
Rio Tinto (RIO) 1,966.50p 3.88%
BHP Billiton (BLT) 749.40p 3.68%
BG Group (BG.) 991.60p 3.13%
Smiths Group (SMIN) 990.50p 2.27%
Centrica (CNA) 206.10p 2.08%
Randgold Resources Ltd. (RRS) 4,145.00p 2.07%
Royal Dutch Shell 'B' (RDSB) 1,551.50p 1.67%
Royal Dutch Shell 'A' (RDSA) 1,542.50p 1.65%

FTSE 100 - Fallers

Capita (CPI) 1,178.00p -2.97%
Hikma Pharmaceuticals (HIK) 2,097.00p -2.51%
Pearson (PSON) 745.50p -2.42%
G4S (GFS) 218.00p -2.37%
Mondi (MNDI) 1,344.00p -2.33%
Tesco (TSCO) 153.40p -2.01%
British American Tobacco (BATS) 3,737.50p -1.64%
Rolls-Royce Holdings (RR.) 580.50p -1.61%
Shire Plc (SHP) 4,384.00p -1.53%
InterContinental Hotels Group (IHG) 2,489.00p -1.43%

FTSE 250 - Risers

Entertainment One Limited (ETO) 164.10p 16.47%
SIG (SHI) 137.60p 5.44%
Petra Diamonds Ltd.(DI) (PDL) 64.15p 4.99%
Polymetal International (POLY) 525.00p 4.48%
Moneysupermarket.com Group (MONY) 333.70p 4.31%
CLS Holdings (CLI) 1,849.00p 3.88%
Tullow Oil (TLW) 177.20p 3.44%
Amec Foster Wheeler (AMFW) 404.80p 3.42%
Wood Group (John) (WG.) 553.00p 2.79%
Acacia Mining (ACA) 189.10p 2.77%

FTSE 250 - Fallers

Stagecoach Group (SGC) 305.70p -14.15%
Jimmy Choo (CHOO) 109.10p -6.11%
Evraz (EVR) 73.15p -4.81%
Go-Ahead Group (GOG) 2,569.00p -4.64%
Victrex plc (VCT) 1,807.00p -4.44%
Genus (GNS) 1,440.00p -3.74%
Kaz Minerals (KAZ) 96.20p -3.70%
Restaurant Group (RTN) 650.50p -3.06%
International Personal Finance (IPF) 336.60p -2.80%
Booker Group (BOK) 176.10p -2.76%