London midday: Traders debate likelihood of ECB action

29th Aug 2014 12:34

- Eurozone CPI data due out- US activity indicators expected later in the day- Weak Japanese economic figurestechMARK 2,847.27 +0.03%FTSE 100 6,818.23 +0.18%FTSE 250 15,864.18 -0.29%UK stocks were registering only a slight advance towards midday, as investors debated the prospect for further easing from the European Central Bank (ECB) at the 4 September policy meeting and ahead of a spate of high-frequency data due for release Stateside later on. As of 12:13, the FTSE 100 was edging 12 points higher to 6,818.23. Eurozone consumer prices slowed to a 0.3% year-on-year rate of change in August, after a reading of 0.4% in the month before, as expected, the latest figures from Eurostat revealed.That follows flat economic growth in the euro area during the second quarter as activity levels in Germany came off sharply.At the so-called 'core' level, which strips out the most volatile items, such as energy, food, alcohol and tobacco, the rate of inflation edged slightly higher, to a 0.9% year-on-year clip (consensus: 0.8%), versus 0.8% in the month before. That slight rise may keep some of the immediate pressure off of the ECB. Nevertheless, on Friday morning before the above data was released, analysts at N.Hill and T.Maharaj at Credit Suisse told clients: "We now expect the ECB to launch a broad-based asset purchase programme - QE - by the end of the year. Importantly, we think this could be clearly telegraphed to markets as soon as next week's Governing Council meeting." Acting as a backdrop, speaking to Bloomberg TV earlier in the day, German finance minister Wolfgang Schaeuble insisted that the ECB can only "buy time" with its monetary policy, emphasising the need for structural economic reforms. Weaker than expected data out of JapanMeanwhile, overnight data released from Japan indicated the country had suffered a second month of weakness, offering what Alpari UK market analyst Joshua Mahony described as "yet another glimpse of the economy at a time where markets want to know if there is enough juice in the system for the Bank of Japan to reach their [inflation] targets, along with the question of whether the sales tax continues to drag the economy down following it's introduction in April".Industrial output in the land of the rising sun grew at a 0.2% month-on-month clip in July, well below the 1% gain which analysts had pencilled in. Household spending contracted by 5.9% year-on-year in July, almost twice the expected rate of decline. Housing market showing signs of slowdownHouse prices inched just 0.1% higher in August, according to Hometrack's monthly national housing survey.It was the second consecutive month that the gap between supply and demand narrowed, with the number of new buys down 0.9%, although this was largely due to seasonal factors. The narrowing meant that although average house prices continued to rise, the upward pressure was reduced. "This is increasing the amount of time properties are spending on the market and resulting in sellers having to accept larger discounts to the asking price to achieve a sale," Hometrack explained.Building society Nationwide offered a more upbeat assessment, with UK house prices up by 0.8% month-on-month (11% year-on-year) versus forecasts for a rise of 10.1%. Tesco anticipates profit fall of up to 27%The pressure is on for new boss Dave Lewis at Tesco after the struggling grocery giant said on Friday that it expects profits to fall by as much as 27% this year and its interim dividend to be cut by 75%. Lewis, due to take over from Philip Clarke who announced his resignation in July, will now join the group one month earlier than planned on 1 September.Stock in Exova, the provider of testing, calibration and advisory services plummeted after the firm said revenues declined 2.7% to £134.7m over the first six months of the year, on the back of a weak performance at its oil&gas, industrial and aero divisions. Sabsa, a wholly-owned subsidiary of drinks giant SABMiller, has completed the sale of its stake in Tsogo Sun through the placing of 293,896 shares and the sale of 7.78m shares. Tsogo Sun also repurchased the company's remaining 133.58m shares. Altogether, the disposal generated around $1bn. Road and rail haulier Stobart Group reported satisfactory trading in all its divisions, with biomass tonnages up in its energy division and higher passenger numbers in its airport business. But profits in its energy business were lower as a result of competition from exports and the end of a transport contract in February.Gaming giant Bwin.party widened its first-half loss, reflecting a fall in casino and poker revenues. Loss before tax in the six months to 30 June 2014 came to €94m, up from €11.6 the previous year. Revenue declined to €317.1m from €342.5m as a solid performance from sports betting was offset by year-on-year declines in casino and poker.Computacenter posted higher first-half profits and a good UK performance, but the IT services provider flagged up challenges in France and Germany. Computacenter said adjusted pre-tax profit in the six months to 30 June rose 6.8% to £28m on a 2.2% rise in revenue to £1.46bnShares in oil explorer Afren slipped after announcing the suspension of two more directors due to their involvement in unauthorised payments. The half-year revenue figure went down to $565.4m compared with $796.8m at the same time last year. The company's chief executive and chief operating officer were also suspended last month.FTSE 100 - RisersAstraZeneca (AZN) 4,594.50p +2.57%RSA Insurance Group (RSA) 457.40p +1.73%St James's Place (STJ) 715.50p +1.63%Sports Direct International (SPD) 730.50p +1.46%Aberdeen Asset Management (ADN) 436.60p +1.14%Coca-Cola HBC AG (CDI) (CCH) 1,415.00p +1.00%3i Group (III) 392.60p +0.93%Imperial Tobacco Group (IMT) 2,613.00p +0.93%HSBC Holdings (HSBA) 652.40p +0.83%GlaxoSmithKline (GSK) 1,474.50p +0.79%FTSE 100 - FallersTesco (TSCO) 234.70p -4.71%Morrison (Wm) Supermarkets (MRW) 178.70p -4.39%Sainsbury (J) (SBRY) 293.60p -3.26%Marks & Spencer Group (MKS) 428.80p -2.12%easyJet (EZJ) 1,333.00p -1.48%Smith & Nephew (SN.) 1,039.00p -1.42%United Utilities Group (UU.) 877.50p -1.29%G4S (GFS) 264.40p -1.20%Persimmon (PSN) 1,317.00p -0.98%Reed Elsevier (REL) 984.00p -0.96%FTSE 250 - RisersBwin.party Digital Entertainment (BPTY) 88.35p +10.23%Enterprise Inns (ETI) 124.90p +4.08%Entertainment One Limited (ETO) 353.00p +3.55%Merlin Entertainments (MERL) 348.40p +2.47%Direct Line Insurance Group (DLG) 295.30p +2.11%Vedanta Resources (VED) 1,001.00p +1.88%Debenhams (DEB) 66.45p +1.84%Ophir Energy (OPHR) 230.90p +1.72%Ted Baker (TED) 1,972.00p +1.70%Hochschild Mining (HOC) 163.20p +1.62%FTSE 250 - FallersExova Group (EXO) 187.80p -12.65%Xaar (XAR) 417.00p -5.01%Ocado Group (OCDO) 327.40p -3.51%Restaurant Group (RTN) 636.50p -3.41%Afren (AFR) 96.30p -3.22%Brown (N.) Group (BWNG) 437.10p -3.06%Redrow (RDW) 272.50p -2.85%AO World (AO.) 215.90p -2.66%Domino Printing Sciences (DNO) 583.50p -2.34%Poundland Group (PLND) 310.70p -2.30%AB