London midday: Stocks erase losses after German sentiment, UK inflation data

UK stocks had pushed into positive territory by Tuesday lunchtime as ongoing concerns about Greece were outweighed by upbeat data from Germany and a positive outlook for consumer spending in Britain.

London’s FTSE 100 was up 0.2% at 6,873 by midday, bouncing off a low of 6,819.78 set early on.

Economic figures from Germany showed that investor confidence improved for the fourth straight month, with the ZEW economic sentiment survey rising to 53 in February from 48.4 in January. The news followed data last week which revealed that the economy expanded faster than expected in the fourth quarter.

The Office for National Statistics revealed that the annual rate of UK consumer-price inflation dropped to a record low of 0.3% in January from 0.5% in December, under the 0.4% consensus forecast.

Economist Howard Archer from IHS Global Insight said the slowdown in price rises “bodes very well” for consumer spending this year: “With inflation likely to fall further and earnings growth now finally trending upwards, consumers should see appreciable improvement in their purchasing power as 2015 progresses.”

Greece continues to be in focus for financial markets after another meeting on Monday did not result in an agreement between the new government and Eurozone finance ministers, as Greek leaders stood firm on their opposition to a bailout extension.

The Eurogroup have now failed in the past two meetings to make any progress and the current aid agreement is due to expire at the end of the month. The Eurogroup will meet again on Friday.

IHG underwhelms, miners rise

Hotels group IHG managed to narrowly beat analysts’ forecasts with its annual results but shares declined in London. The Crowne Plaza and Holiday Inn operator said reported operating profit for 2014 totalled $651m, down 3% but slightly ahead of the consensus estimate of $646m.

“In all, the results are solid if somewhat unexciting,” said Keith Bowman from Hargreaves Lansdown Stockbrokers.

Mining stocks were performing well, including Anglo American, Rio Tinto, BHP Billiton, Fresnillo and Antofagasta.

Oil and gas engineer John Wood Group jumped after growing sales and profits by double-digit rates last year and said it expected to deliver growth despite the lower oil price environment.

Royal Mail was hit by gloomy comments from Morgan Stanley as it noted “continued operational risk” at the postal delivery group. The bank cut its target price for the shares from 350p to 340p, saying that its recent concerns about a slowdown in revenue growth are “playing out as expected”.

Sports Direct was lower on the news that Jeff Blue, M&A director, has left the company. Meanwhile, shares were hit by negative read-across from Glasgow Rangers football club, to whom Sports Direct chairman Mike Ashley recently lent £10m in an effort help keep the club afloat.

Insurer Brit surged after accepting a £1.22bn cash takeover offer from Canadian rival Fairfax Financial.

Market Movers
techMARK 3,115.39 +0.11%
FTSE 100 6,873.16 +0.23%
FTSE 250 16,935.63 +0.44%

FTSE 100 - Risers
Anglo American (AAL) 1,248.00p +2.25%
Rio Tinto (RIO) 3,224.00p +1.91%
Dixons Carphone (DC.) 430.90p +1.87%
BHP Billiton (BLT) 1,614.50p +1.60%
Diageo (DGE) 1,864.00p +1.33%
Fresnillo (FRES) 851.50p +1.31%
Antofagasta (ANTO) 759.00p +1.20%
Lloyds Banking Group (LLOY) 76.62p +1.18%
Royal Dutch Shell 'A' (RDSA) 2,154.00p +1.06%
Imperial Tobacco Group (IMT) 3,022.00p +0.83%

FTSE 100 - Fallers
InterContinental Hotels Group (IHG) 2,470.00p -4.56%
Royal Mail (RMG) 438.10p -2.21%
Whitbread (WTB) 4,930.00p -1.60%
Sports Direct International (SPD) 671.50p -1.10%
Compass Group (CPG) 1,104.00p -0.99%
Coca-Cola HBC AG (CDI) (CCH) 1,181.00p -0.92%
Severn Trent (SVT) 2,006.00p -0.79%
Barclays (BARC) 256.95p -0.71%
G4S (GFS) 282.30p -0.70%
Admiral Group (ADM) 1,420.00p -0.70%

FTSE 250 - Risers
Wood Group (John) (WG.) 703.00p +11.59%
Brit (BRIT) 302.70p +10.39%
De La Rue (DLAR) 545.50p +4.80%
Smith (DS) (SMDS) 334.20p +3.72%
Synthomer (SYNT) 258.30p +3.61%
Premier Oil (PMO) 186.40p +3.33%
Nostrum Oil & Gas (NOG) 528.00p +3.12%
Bwin.party Digital Entertainment (BPTY) 92.80p +3.11%
Oxford Instruments (OXIG) 762.00p +2.97%
Petrofac Ltd. (PFC) 831.50p +2.65%

FTSE 250 - Fallers
Game Digital (GMD) 253.10p -2.43%
Vedanta Resources (VED) 548.50p -2.23%
Booker Group (BOK) 152.80p -2.11%
Ocado Group (OCDO) 380.20p -1.32%
Rank Group (RNK) 184.50p -1.28%
Shaftesbury (SHB) 791.50p -1.19%
Grafton Group Units (GFTU) 725.50p -1.16%
Telecom Plus (TEP) 1,179.00p -1.09%
COLT Group SA (COLT) 147.00p -1.08%
Stagecoach Group (SGC) 341.00p -1.07%