London open: Chinese credit data weigh on stocks

News that Chinese banks remained unwilling to lend in October weighed on stock markets across Europe on Thursday, London included.

So-called aggregate financing in Asia’s largest economy, the widest measure of new credit, came in at 476.7bn yuan for October, the least in 15 months.

At 0905 GMT, the FTSE was trading 24.60 points lower at 6,271.50.

Just as the fresh economic news out of China hit the wires, European Central Bank president Mario Draghi began his testimony before the European parliament’s economic and monetary affairs committee.

Draghi said the normalisation of inflation might take longer than had been envisaged, implying that new stimulus might yet be forthcoming. Likewise, he said the ECB had always been clear that quantitative easing could run past the September 2016 deadline if its inflation target was at risk of being compromised.

His remarks sent the euro immediately lower by half a percentage point towards the 1.07 mark.

Meanwhile, Berlin's Council of Economic Experts had reportedly called on the ECB to consider trimming its asset purchase programme early in order to avoid unwanted results; that is to say, financial bubbles.

There was little in the way of economic data on Thursday’s agenda. However, a raft of Fed speakers was scheduled to take to the podium throughout the day, including Fed chairwoman Janet Yellen at 15:30 GMT.

Back in the UK, house price growth accelerated in October. The Royal Institute of Chartered Surveyors' monthly house price balance jumped to a reading of +49 from +44 in the month before compared with consensus of +45, close to August's 15-month high of +53.

Bank of England chief economist Andrew Haldane was set to give a speech at 17:00 GMT.

FTSE 100: Rolls Royce guides towards profits at lower end of forecast range

Aerospace and engineering firm Rolls-Royce said earnings for the year will be at the low end of guidance as it downgraded its expectations for next year and warned of a possible cut to the dividend. The company reaffirmed its 2015 guidance but said profit for the year is expected to be at the lower of its £1.33bn to £1.48bn range.

Military hardware maker BAE Systems said it was is axing 371 jobs at its military aircraft unit and announced earnings per share for the year would be 38p as its export order book thinned. The company said it was slashing the jobs and slowing the production rate of its Typhoon fighter jet “to ensure production continuity at competitive costs over the medium term”.

Luxury retailer Burberry posted a rise in first half pre-tax profit but warned the market environment remains challenging. For the six months to the end of September, adjusted pre-tax profit rose to £153m from the same period last year, while revenue was unchanged at £1.1bn. Reported pre-tax profit was up 9% to £155m. In addition, the company said that since the start of the third quarter, comparable sales, although volatile, have improved overall relative to the second quarter.

Interim pre-tax profits at SAB Miller fell to $2.3bn from $2.82bn. Revenues were also down to $9.9bn from $11.3bn. EBITA fell to $2.9bn from $3.2bn. “Continued depreciation of key operating currencies against the US dollar has had an adverse impact on our results on both a translational and transactional basis. The adverse translational foreign exchange impact on EBITA in the period was $497 million, with a further adverse transactional impact on margins,” the company said.

BHP may we weighed down by a report in The Guardian that the Brazilian government might slap a fine on the Anglo-Australian outfit for the "environmental catastrophe" after a tailings dam part-owned by the firm broke.

FTSE 250: IMI guides lower as well

IMI slumped on Thursday after the engineering company said it expects adjusted earnings for the year to be towards the lower end of the range of current market estimates amid challenging market conditions.

Bus and train operator Firstgroup posted a 33% drop in first-half pre-tax profit as revenue fell due to the loss of certain rail franchises and a later than normal start to this school year for US students. For the six months to the end of September, adjusted pre-tax profit came in at £22.4m from £33.3m in the same period last year, on revenue of £2.44bn, down 17%.

Market Movers

FTSE 100 (UKX) 6,291.01 -0.10%
FTSE 250 (MCX) 17,062.01 -0.23%
techMARK (TASX) 3,105.68 -0.01%

FTSE 100 - Risers

BAE Systems (BA.) 456.60p 4.18%
Burberry Group (BRBY) 1,358.00p 1.72%
Rio Tinto (RIO) 2,341.50p 1.50%
BT Group (BT.A) 482.30p 1.44%
Vodafone Group (VOD) 227.55p 1.38%
3i Group (III) 498.10p 1.14%
Standard Chartered (STAN) 600.20p 1.08%
Reckitt Benckiser Group (RB.) 6,350.00p 0.87%
Berkeley Group Holdings (The) (BKG) 3,139.00p 0.77%
HSBC Holdings (HSBA) 527.60p 0.74%

FTSE 100 - Fallers

Rolls-Royce Holdings (RR.) 549.00p -17.69%
Sainsbury (J) (SBRY) 246.40p -2.72%
International Consolidated Airlines Group SA (CDI) (IAG) 600.00p -2.36%
Royal Dutch Shell 'B' (RDSB) 1,635.00p -1.95%
Royal Dutch Shell 'A' (RDSA) 1,628.00p -1.72%
Marks & Spencer Group (MKS) 517.00p -1.71%
Pearson (PSON) 805.50p -1.65%
Shire Plc (SHP) 4,663.00p -1.46%
Meggitt (MGGT) 377.80p -1.41%
Smiths Group (SMIN) 970.50p -1.37%

FTSE 250 - Risers

FirstGroup (FGP) 100.30p 2.92%
Cable & Wireless Communications (CWC) 74.00p 1.37%
DCC (DCC) 5,835.00p 1.30%
esure Group (ESUR) 248.70p 1.14%
Atkins (WS) (ATK) 1,377.00p 1.10%
Polar Capital Technology Trust (PCT) 606.50p 1.08%
Indivior (INDV) 201.40p 1.05%
Derwent London (DLN) 3,712.00p 0.92%
Grafton Group Units (GFTU) 655.50p 0.92%
Tritax Big Box Reit (BBOX) 126.60p 0.88%

FTSE 250 - Fallers

Spire Healthcare Group (SPI) 321.50p -10.57%
Halfords Group (HFD) 392.00p -8.84%
Morgan Advanced Materials (MGAM) 245.80p -8.01%
Shawbrook Group (SHAW) 334.70p -7.29%
IMI (IMI) 908.50p -6.87%
Just Eat (JE.) 440.00p -3.85%
Diploma (DPLM) 613.50p -3.61%
Spectris (SXS) 1,710.00p -3.12%
Petra Diamonds Ltd.(DI) (PDL) 59.25p -2.87%
Restaurant Group (RTN) 682.00p -2.64%