London midday: Stocks fall as eurozone falls further into deflation

London stocks fell on Friday as investors waded through corporate earnings and as data showed the eurozone fell further into deflation in April.

Royal Bank of Scotland’s shares were in the red after reporting a first quarter £968m loss, more than double the loss the same period a year ago. The loss reflected a £1.2bn payment to the UK Treasury to end a golden share agreement that gave the government first dibs on any dividend payments.

British Airways owner International Consolidated Airlines was also under the cosh after reporting a drop in passenger unit revenue for the first quarter at constant currency.

Education publisher Pearson slumped after posting a 9% drop in revenue at constant exchange rates in the first quarter.

Restaurant Group slid after it warned over its annual profits, as it highlighted a further deterioration in trading conditions and reported a 2.7% fall in like-for-like sales in the 17 weeks to 24 April. The company, which owns restaurants such as Garfunkel’s and Chiquito, also announced the departure of its chief financial officer Stephen Critoph.

Meanwhile, consumer prices in the eurozone fell more than expected in April, according to data released by Eurostat. Prices declined 0.2% on the year, having been steady at a 0.1% drop in March. This was a bigger fall than the 0.1% forecast by economists, with energy prices proving to be the biggest drag as they slid 8.6% on the year.

Core inflation rose 0.8%, missing expectations for a 1% increase.

“Underlying inflation continues to run away from the ECB’s base line rate of 2%,” said Michael Hewson, chief market analyst at CMC Markets.

Eurozone economic growth data for the first quarter from Eurostat was more positive. Seasonally-adjusted gross domestic product rose 0.6% compared with the previous quarter when it grew 0.3%. This was stronger than the 0.4% growth pencilled in by economists.

Separately, Eurostat said the eurozone unemployment rate nudged down to 10.2% in March from 10.4% in February and 11.2% in the same month last year. This marked the lowest rate in the bloc since August 2011. Economists had been expecting the rate to remain unchanged at 10.3%.

In the UK, consumer confidence declined in April, according to a GfK survey. The sentiment index fell to -3 this month from 0 in March, worse than analysts’ estimates of -1.

The number of Britain’s mortgage approvals came to 71,357 last month, down from 73,195 in February, the Bank of England said. Analysts had pencilled in 74,400 approvals.

“Although the number of approvals remains high relative to the recent past, it is clear that the spike around the start of the year generated by buyers entering the market in an attempt to transact before April’s stamp duty changes for buy-to-let investors has well and truly passed,” according to Oliver Jones, economist at Capital Economics.

Still to come, US personal income and spending at 1330 BST, University of Michigan’s consumer confidence at 1500 BST and the Baker Hughes US Rig Count at 1800 BST.

Meanwhile, oil prices edged to new 2016 highs on a weak dollar with Brent crude up 0.53% to $48.40 per barrel and West Texas Intermediate up 1.16% to $46.57 per barrel at 1149 BST.

Market Movers

FTSE 100 (UKX) 6,269.56 -0.84%
FTSE 250 (MCX) 16,962.10 -0.61%
techMARK (TASX) 3,080.34 -0.44%

FTSE 100 - Risers

BT Group (BT.A) 442.25p 1.84%
Direct Line Insurance Group (DLG) 362.80p 1.03%
Anglo American (AAL) 758.50p 0.70%
Inmarsat (ISAT) 929.00p 0.60%
Sage Group (SGE) 596.00p 0.59%
Imperial Brands (IMB) 3,708.00p 0.56%
Fresnillo (FRES) 1,101.00p 0.55%
Randgold Resources Ltd. (RRS) 6,560.00p 0.54%
Paddy Power Betfair (PPB) 9,040.00p 0.50%
Glencore (GLEN) 157.15p 0.45%

FTSE 100 - Fallers

Berkeley Group Holdings (The) (BKG) 2,939.00p -4.14%
International Consolidated Airlines Group SA (CDI) (IAG) 530.00p -3.81%
BHP Billiton (BLT) 923.00p -2.40%
TUI AG Reg Shs (DI) (TUI) 999.50p -2.39%
Royal Bank of Scotland Group (RBS) 239.30p -2.25%
Taylor Wimpey (TW.) 183.10p -2.14%
Ashtead Group (AHT) 905.00p -2.11%
Whitbread (WTB) 3,929.00p -2.07%
HSBC Holdings (HSBA) 457.80p -2.04%
Barratt Developments (BDEV) 528.50p -2.04%

FTSE 250 - Risers

Rotork (ROR) 189.90p 5.85%
Morgan Advanced Materials (MGAM) 241.60p 2.42%
AO World (AO.) 188.10p 1.68%
John Laing Group (JLG) 212.80p 1.33%
Tullow Oil (TLW) 285.10p 1.31%
Ibstock (IBST) 200.10p 1.16%
Weir Group (WEIR) 1,227.00p 1.15%
Berendsen (BRSN) 1,189.00p 0.93%
Kaz Minerals (KAZ) 174.10p 0.93%
Indivior (INDV) 163.50p 0.93%

FTSE 250 - Fallers

Restaurant Group (RTN) 288.40p -22.95%
Ophir Energy (OPHR) 76.95p -16.27%
Cineworld Group (CINE) 515.50p -4.80%
Sports Direct International (SPD) 397.30p -3.57%
IP Group (IPO) 170.30p -3.40%
Telecom Plus (TEP) 968.00p -3.30%
Cobham (COB) 157.80p -3.25%
OneSavings Bank (OSB) 291.40p -2.87%
Ocado Group (OCDO) 305.80p -2.33%
Wetherspoon (J.D.) (JDW) 678.50p -2.30%