London midday: Stocks trim losses, but Fed and Greece still in focus

UK stocks fell on Thursday but had erased some losses by lunchtime as oil prices rebounded slightly, though the mood was still cautious as investors remained fixed on US monetary policy and developments in Greece.

The FTSE 100, having dropped over 1% early on, was down just 0.2% at 6,814 by midday.

The Federal Reserve on Wednesday night painted an improved picture of the economy but said it would still "be patient in beginning to normalise the stance of monetary policy" and highlighted that it was watching global economic developments.

The language was widely interpreted to mean that policymakers won't begin to hike rates from near-zero for at least another two Fed meetings. Analysts at Danske Bank said the statement “raises the likelihood of a later hike than we currently anticipate (June 2015)”.

Brent crude was up 0.5% at $48.70 a barrel, after dropping near to a six-year low on Wednesday after US government data showed that crude inventories in the States rose by 8.87m barrels to 406.7m last week, the highest since the early 1980s.

Greece was continuing to weigh on investors’ minds in the aftermath of Syriza’s election victory at the weekend, as new prime minister Alexis Tsipras looks to renegotiate the terms of the bailout with the country’s creditors. The new government is now thought to be looking to veto new proposed sanctions by the EU on Russia.

“This issue is looking like it will be the first big clash between Syriza and the rest of the region, a play-fight before the main event: the renegotiation of Greek debt,” said analyst Connor Campbell from Spreadex.

Shell curtails spending after weak Q4

Oil major Shell said it is looking to reduce costs and lower investment in 2015 in response to the collapse in crude prices, as it curtailed over $15bn of potential spending over the next three years. The comments came as the firm reported adjusted annual profit growth of 12% in the fourth quarter to $3.3bn, well below the consensus forecast of $4.2bn.

Shell’s shares were down 4% by midday, dragging others in the sector lower such as BP, BG Group, Tullow Oil, Afren and Soco International. Soco also disappointed by revealing that its forecast for 2015 production has been lowered.

News of a cut in spending by Shell, one of the biggest oil groups in the world, was also weighing on stocks in the energy services and equipment sectors, such as Weir Group, Petrofac, Wood Group and Hunting.

Royal Mail declined after revealing that its chairman Donald Brydon will step down later this year.

One bright spark in London was Diageo after the drinks giant delivered a much improved performance in the second quarter with stronger net sales, volumes and margins.

Market Movers
techMARK 3,088.52 +0.16%
FTSE 100 6,814.37 -0.17%
FTSE 250 16,348.45 -0.47%

FTSE 100 - Risers
easyJet (EZJ) 1,844.00p +4.36%
Diageo (DGE) 2,025.50p +3.24%
Hargreaves Lansdown (HL.) 1,020.00p +2.51%
Coca-Cola HBC AG (CDI) (CCH) 1,096.00p +2.24%
Taylor Wimpey (TW.) 137.10p +2.08%
Marks & Spencer Group (MKS) 487.00p +1.97%
Unilever (ULVR) 2,948.00p +1.76%
Imperial Tobacco Group (IMT) 3,151.00p +1.74%
Barratt Developments (BDEV) 465.50p +1.70%
Centrica (CNA) 291.80p +1.46%

FTSE 100 - Fallers
Fresnillo (FRES) 869.00p -4.51%
Royal Dutch Shell 'B' (RDSB) 2,156.50p -4.07%
Royal Dutch Shell 'A' (RDSA) 2,070.50p -3.85%
Antofagasta (ANTO) 650.50p -3.42%
Randgold Resources Ltd. (RRS) 5,415.00p -3.04%
Johnson Matthey (JMAT) 3,299.00p -2.54%
BP (BP.) 423.55p -2.17%
Weir Group (WEIR) 1,641.00p -2.15%
Standard Chartered (STAN) 889.50p -1.71%
BG Group (BG.) 883.60p -1.58%

FTSE 250 - Risers
Nostrum Oil & Gas (NOG) 600.00p +7.14%
Jimmy Choo (CHOO) 177.00p +2.91%
Ophir Energy (OPHR) 128.90p +2.38%
Infinis Energy (INFI) 191.00p +2.14%
William Hill (WMH) 384.70p +2.12%
JD Sports Fashion (JD.) 512.00p +1.99%
Rank Group (RNK) 169.00p +1.87%
Countrywide (CWD) 455.70p +1.70%
Cairn Energy (CNE) 184.10p +1.60%
RPC Group (RPC) 558.50p +1.55%

FTSE 250 - Fallers
Soco International (SIA) 262.80p -6.14%
Acacia Mining (ACA) 273.30p -5.17%
Petrofac Ltd. (PFC) 660.00p -5.10%
Centamin (DI) (CEY) 65.45p -4.80%
PayPoint (PAY) 838.00p -4.72%
Amec Foster Wheeler (AMFW) 793.50p -4.68%
IG Group Holdings (IGG) 727.50p -3.90%
Serco Group (SRP) 153.40p -3.88%
Hunting (HTG) 400.00p -3.54%
Euromoney Institutional Investor (ERM) 1,042.00p -3.34%