London midday: Stocks pare losses after in-line macro data

18th Sep 2012 12:06

Inflation data was in line with forecasts while the Spanish debt auction went as well as could be expected, prompting London equities to claw back some of the losses seen in early tradingThe Consumer Prices Index (CPI) measure of inflation dropped to 2.5% in August, down from 2.6% in July, helped by falls in the price of clothing and footwear, furniture and household equipment, and domestic gas. The consensus estimate had been for a rise of 2.5%. Samuel Tombs, UK Economist at Capital Economics said July inflation had been boosted by high street sales finishing earlier than usual and a sharp Olympics-related rise in air fares inflation. This meant a drop back in August always looked likely, he said. Tombs added that the recent increase in oil prices meant inflation was falling at a slower pace than seemed likely a few months ago.The Spanish Treasury has held its first debt auction since the European Central Bank (ECB) announced its plan of Outright Monetary Transactions (OMT) for ailing countries.With Spain feeling increased pressure to request assistance, the Treasury has been able to issue 12 and 18-month bills for €4.6bn, more than the top end of the €3.5 - €4.5bn target.18-month bills were issued for €1.02bn (maturity: February 21, 2014) at a yield of 3.072%, lower than the previous 3.335%. 12-month bills were issued for €3.56bn (maturity: September 20, 2013) at a yield of 2.835%, lower than the previous 3.07%.Sporting chanceSports fashionwear firm JD Sports is having a few teething problems with the integration of the Black's Leisure store portfolio it acquired a while back. The firm said Blacks had made an initial loss of £10m, as expected, due to a critical lack of stock and unsustainable cost base. The retailer's stricken rival, JJB Sports, shot up on reports that a new potential bidder may have thrown its hat into the ring for the company which put itself up for sale last month.According to Sky News, privately owned Stafford Group, which owns a sporting chain in Ireland, is interested in acquiring JJB.Elsewhere on the high street, department store group Debenhams saw like-for-like (LFL) sales rise 3.7% in the final 10 weeks of its financial year, which ran to September 1st. For the full-year, LFL sales were up 1.6%.Paying dividendsHouse-building and construction firm Galliford Try saw profits soar last year, paving the way for its full-year dividend pay-out to almost double. Group revenue in the year ended June 30th rose 17% to £1,504m from £1,284m the year before. Profit before tax surged 80% to £63.1m from £35.1m the previous year, while earnings per share jumped 89% to 60.9p from 32.2p last year. The divi rose in line with earnings, from 16p to 30p.Broker downgrades have put insurance titan Aviva on the skids, pushing the stock's dividend yield beyond seven per cent; BofA Merrill Lynch has downgraded Aviva to 'underperform', although the target price has been raised to 360p from 330p, while Deutsche bank has moved to a 'hold' recommendation and edged up the target price from 360p to 375p.Imperial Tobacco and British American Tobacco are doing well after Nomura lifted its price targets on both this morning. Berenberg has initiated coverage of household goods colossus Unilever at buy. Mixed fortunes for extractorsGold exploration company Condor is celebrating a mineral resource of 2.41m ounces of gold equivalent at its wholly-owned La India Project in Nicaragua, with gold up 46 per cent to 2.375m oz, well ahead of the year-end target of 2.0m gold.Things are not going so well for Royal Dutch Shell. After announcing delays to its offshore exploration programme in Alaska on Monday, reports on Tuesday suggest Royal Dutch Shell is also struggling with production targets in Iraq.Other marketsOil prices remain on the slide, despite the White House quashing rumours that strategic oil reserves may be released. The most active futures contract for Brent crude is off 39 cents to $113.40 a barrel.Gold for December delivery is down $11.80 to $1,758.80 an ounce.Investors are nibbling away at gilts after the inflation data, with the benchmark 10-year gilt up 33p, driving the yield down to 1.89% from 1.93% overnight. FTSE 100 - RisersDiageo (DGE) 1,708.50p +1.48%Vodafone Group (VOD) 176.20p +1.47%Imperial Tobacco Group (IMT) 2,352.00p +1.47%British American Tobacco (BATS) 3,199.00p +1.43%Bunzl (BNZL) 1,102.00p +1.29%United Utilities Group (UU.) 694.50p +0.87%National Grid (NG.) 684.50p +0.81%Unilever (ULVR) 2,286.00p +0.79%GlaxoSmithKline (GSK) 1,443.50p +0.77%Sage Group (SGE) 316.80p +0.54%FTSE 100 - FallersAviva (AV.) 343.00p -4.51%GKN (GKN) 227.80p -3.84%Vedanta Resources (VED) 1,056.00p -3.39%ICAP (IAP) 340.30p -2.85%Prudential (PRU) 818.50p -2.68%Eurasian Natural Resources Corp. (ENRC) 352.90p -2.68%Wolseley (WOS) 2,719.00p -2.51%Barclays (BARC) 222.30p -2.50%BP (BP.) 440.30p -2.48%Kazakhmys (KAZ) 742.00p -2.43%FTSE 250 - RisersCentamin (DI) (CEY) 90.90p +2.48%Galliford Try (GFRD) 687.00p +2.23%Rank Group (RNK) 142.20p +1.79%IG Group Holdings (IGG) 473.00p +1.50%Rathbone Brothers (RAT) 1,347.00p +1.28%Big Yellow Group (BYG) 325.00p +0.96%Dechra Pharmaceuticals (DPH) 574.00p +0.88%De La Rue (DLAR) 1,001.00p +0.81%Provident Financial (PFG) 1,390.00p +0.80%Domino Printing Sciences (DNO) 567.00p +0.80%FTSE 250 - FallersLaird (LRD) 228.80p -6.19%Homeserve (HSV) 230.20p -4.64%Imagination Technologies Group (IMG) 543.00p -4.49%Ferrexpo (FXPO) 214.90p -4.19%Inchcape (INCH) 379.30p -3.80%Menzies(John) (MNZS) 616.00p -3.75%New World Resources A Shares (NWR) 299.00p -3.55%Victrex (VCT) 1,399.00p -3.45%Savills (SVS) 401.90p -3.11%FirstGroup (FGP) 245.80p -3.08%JH