London midday: Miners drag stocks lower as traders weigh UK, Japan data

Mining stocks dragged UK equities lower on Friday at midday as investors sifted through mixed economic data.

Anglo American, Fresnillo, BHP Billiton and Randgold Resources were the top fallers on the FTSE 100 as metal prices dropped albeit copper rose. Oil prices also fell, with Brent crude down 0.91% to $45.05 per barrel and West Texas Intermediate down 1.04% to $42.05 per barrel at 1136 GMT.

The second estimate of third quarter UK gross domestic product from the Office for National Statistics had little effect on the market, with an annualised unrevised growth of 2.3% in October, as expected by analysts. The quarter-on-quarter comparison was also unrevised at 0.5% growth in the three months to September, down from 0.7% in the second quarter.

“Confirmation of reduced GDP growth of 0.5% quarter-on-quarter in the third quarter reinforces our belief that the Bank of England is unlikely to raise interest rates before the second quarter of 2016,” said Howard Archer, chief UK and European economist at IHS Global Insight.

“However, we do expect the Bank of England will act before mid-2016. This is based on our belief that the UK will see some improvement in growth from its third quarter soft patch and that consumer price inflation will start rising gradually from late-2015.”

Meanwhile, UK consumer confidence declined to a six-month low in November, according to data published from research company GfK. The consumer sentiment index declined from 2 points to 1 in October, the lowest level since May and falling short of analysts’ expectations for an unchanged reading.

UK house prices growth slowed by more than expected in November to record the smallest rise since June, according to research by the Nationwide building society. The Nationwide house price index rose 0.1% in November compared to the previous month, down from the 0.6% monthly rise recorded in October, and lower than the consensus forecast for a 0.50% increase.

The year on year measure showed a 3.7% increase, lower than the estimated 4.2% and down slightly from October's five-month high of 3.9% and 3.8% in September and the 26-month low of 3.2% in August.

Chancellor George Osborne's new 3% surcharge on Stamp Duty on buy-to-let (BTL) properties and second homes, which was announced this week and will come into force from April 2016, is expected to lead to a frantic rush as prospective investors snap up properties in the next four months to avoid the new charge.

Elsewhere, Japanese data overnight showed an unexpected fall in the jobless rate to 3.1% in October from 3.4% the previous month, while the consumer price index rose to 0.3% year-on-year last month from 0%, as anticipated by analysts. However, CPI fell 0.1% year-on-year, as predicted, when stripping out volatile food prices.

Japan’s household spending dropped 2.4% in October, compared to forecasts of 0% and September’s 0.4% decrease. The reports come amid pressure on the Bank of Japan to increase its bond buying programme in the coming months following prolonged weakness in inflation.

“While Japan’s Jobless data improved, inflation showed need for continued BoJ stimulus,” said Michael van Dulken and Augustin Eden at Accendo Markets.

Japan's Nikkei 225 closed down 0.30% following the data.

Chinese stocks were also sitting lower with the Shanghai composite finishing down 5.49%, the largest daily percentage loss since 18 August. The declines in China came as authorities investigated brokerages Citic Securities Co. and Guosen Securities over suspected violations.

In the US, the stock market resumes trading although it will close early at 1800 GMT for the Thanksgiving holiday.

Company-wise, Betfair gained after Deutsche Bank upgraded the stock to ‘buy’ from ‘hold’ and lifted the price target to 4,200p from 2,650p. The bank said it reckons Betfair can grow revenues/profits materially above the market growth rate following the group’s relentless focus on product innovation coupled with brand investment over the past 24 months.

HSBC edged lower on news it will shut down its private banking business in India by March of next year and the 70 people working in the division will be moved to the retail bank.

SVG Capital advanced after reporting a 3% increase in net asset value for the three months to 31 October.

Market Movers

FTSE 100 (UKX) 6,387.80 -0.08%
FTSE 250 (MCX) 17,226.84 0.06%
techMARK (TASX) 3,224.41 0.08%

FTSE 100 - Risers

easyJet (EZJ) 1,649.00p 1.35%
Relx plc (REL) 1,197.00p 1.18%
Rolls-Royce Holdings (RR.) 608.00p 1.08%
Dixons Carphone (DC.) 478.70p 1.03%
CRH (CRH) 1,986.00p 1.02%
Inmarsat (ISAT) 1,098.00p 0.92%
Ashtead Group (AHT) 1,089.00p 0.83%
Babcock International Group (BAB) 1,078.00p 0.65%
Legal & General Group (LGEN) 273.10p 0.63%
Admiral Group (ADM) 1,611.00p 0.62%

FTSE 100 - Fallers

Anglo American (AAL) 411.70p -5.53%
Fresnillo (FRES) 729.00p -2.67%
BHP Billiton (BLT) 812.60p -2.47%
Antofagasta (ANTO) 506.00p -2.22%
Randgold Resources Ltd. (RRS) 4,094.00p -1.96%
Glencore (GLEN) 94.08p -1.88%
Rio Tinto (RIO) 2,228.50p -1.87%
GKN (GKN) 296.90p -1.72%
Johnson Matthey (JMAT) 2,837.00p -1.53%
Aberdeen Asset Management (ADN) 338.40p -1.48%

FTSE 250 - Risers

Supergroup (SGP) 1,628.00p 4.03%
Pennon Group (PNN) 865.50p 3.41%
Kaz Minerals (KAZ) 101.00p 3.32%
IP Group (IPO) 242.80p 3.32%
Thomas Cook Group (TCG) 117.20p 3.08%
SVG Capital (SVI) 473.70p 2.96%
Paragon Group Of Companies (PAG) 373.40p 2.87%
SIG (SHI) 137.70p 2.76%
Debenhams (DEB) 82.65p 2.29%
Petra Diamonds Ltd.(DI) (PDL) 58.65p 2.09%

FTSE 250 - Fallers

NMC Health (NMC) 865.50p -2.97%
Aldermore Group (ALD) 230.00p -2.75%
Fidelity China Special Situations (FCSS) 134.90p -2.60%
Jimmy Choo (CHOO) 140.80p -2.56%
Polymetal International (POLY) 540.00p -2.53%
Genesis Emerging Markets Fund Ltd Ptg NPV (GSS) 462.10p -1.89%
Amec Foster Wheeler (AMFW) 431.30p -1.84%
Just Retirement Group (JRG) 159.00p -1.79%
Circassia Pharmaceuticals (CIR) 278.00p -1.77%
Weir Group (WEIR) 1,176.00p -1.75%