London midday: Stocks decline as oil prices slide

London stocks declined as better-than-expected UK retail sales data failed to offset another drop in oil prices.

Oil prices took another turn for the worse after data from the Energy Information Administration showed US crude inventories rose by 2.1m barrels last week to a peak of 504.1m barrels. It marked the third week of record highs in the past month and added to concerns about the global oversupply.

Brent crude fell 1.7% to $33.68 per barrel and West Texas Intermediate dropped 2.1% to $30.12 per barrel at 1137 GMT.

UK retail sales surged past expectations in January as consumers stocked up on furniture and electrical goods, data from the Office for National Statistics revealed on Friday.

Sales jumped 5.2% in January compared to the same month a year ago, beating analysts’ estimates for a 3.4% increase.

On the month retail sales rose 2.3% in January, surpassing forecasts for a 0.7% gain.

“After an underwhelming Christmas for British retail, economists will be encouraged to see the sector return to growth in January," said Dennis de Jong, managing director at UFX.com

In afternoon trade, US inflation will be in focus amid speculation on the next change in interest rates. The consumer price index is expected to rise 1.3% year-on-year in January compared to 0.7% the previous month, moving closer to the Federal Reserve’s 2% target. Such an improvement in inflation might increase the chances of an interest rate hike at next month’s policy meeting.

Meanwhile, uncertainty surrounding the potential impact of a vote on Britain leaving the European Union saw the pound fall 0.36% against the US dollar. Prime Minister David Cameron met resistance from eastern European states over demands for more welfare curbs on non-British citizens during negotiations on Thursday.

In company news, shares in Coca-Cola HBC soared after the company reported an increase in full year volumes and earnings despite foreign exchange having an adverse impact on revenues.

Essentra rallied after the plastic and fibre products firm saw full year revenue rise 27% on a constant currency to £1.1bn.

ITV gained after it received ministerial approval for its acquisition of UTV Media’s television assets.

Sports Direct was in the red after Jefferies said taking the company private “makes sense” as it would remove the corporate governance issues from the public eye. Businessman Mike Ashley, who owns 55% of Sports Direct, was urged to line up a bid as the retailer’s shares have lost almost half of their value since the start of December.

Market Movers

FTSE 100 (UKX) 5,951.67 -0.34%
FTSE 250 (MCX) 16,155.02 -0.13%
techMARK (TASX) 3,086.97 -0.20%

FTSE 100 - Risers

Coca-Cola HBC AG (CDI) (CCH) 1,410.00p 2.62%
Fresnillo (FRES) 939.50p 2.06%
ITV (ITV) 253.20p 1.44%
Dixons Carphone (DC.) 452.60p 1.41%
Provident Financial (PFG) 3,213.00p 1.23%
Randgold Resources Ltd. (RRS) 6,270.00p 1.13%
Next (NXT) 7,020.00p 0.86%
TUI AG Reg Shs (DI) (TUI) 1,061.00p 0.86%
Reckitt Benckiser Group (RB.) 6,540.00p 0.83%
ARM Holdings (ARM) 938.50p 0.70%

FTSE 100 - Fallers

Sports Direct International (SPD) 400.20p -2.37%
Ashtead Group (AHT) 839.00p -1.93%
Royal Bank of Scotland Group (RBS) 247.10p -1.91%
Royal Dutch Shell 'B' (RDSB) 1,557.50p -1.86%
Glencore (GLEN) 115.75p -1.82%
Schroders (SDR) 2,447.00p -1.81%
Tesco (TSCO) 183.50p -1.74%
Shire Plc (SHP) 3,789.00p -1.66%
Prudential (PRU) 1,226.00p -1.64%
Royal Dutch Shell 'A' (RDSA) 1,563.00p -1.64%

FTSE 250 - Risers

Allied Minds (ALM) 346.40p 9.93%
Essentra (ESNT) 805.00p 7.98%
Centamin (DI) (CEY) 84.00p 3.58%
Rightmove (RMV) 3,740.00p 3.54%
Acacia Mining (ACA) 231.20p 3.26%
Diploma (DPLM) 680.50p 2.33%
Daejan Holdings (DJAN) 5,950.00p 2.32%
Paddy Power Betfair (PPB) 9,805.00p 2.14%
AO World (AO.) 169.50p 2.11%
IP Group (IPO) 183.10p 2.01%

FTSE 250 - Fallers

Indivior (INDV) 154.60p -9.59%
Mediclinic International (MDC) 825.50p -5.22%
OneSavings Bank (OSB) 261.00p -4.71%
Millennium & Copthorne Hotels (MLC) 372.30p -4.54%
Tullow Oil (TLW) 162.50p -4.30%
Hastings Group Holdings (HSTG) 148.40p -4.01%
Evraz (EVR) 64.90p -3.99%
Amec Foster Wheeler (AMFW) 351.40p -3.59%
Jimmy Choo (CHOO) 120.00p -2.91%
Ophir Energy (OPHR) 75.70p -2.82%