London close: FTSE ends slightly lower ahead of US earnings

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LONDON (ShareCast) - - FTSE closes down 7.02 points at 6,674.74
- Focus turns to Apple (NasdaqGS: AAPL - news) and Facebook (NasdaqGS: FB - news) earnings
- UK public sector net borrowing falls

techMARK 2,742.15 +0.13%
FTSE 100 6,674.74 -0.11%
FTSE 250 15,989.64 -0.58%

The FTSE 100 settled just slightly lower than its opening level as investors weighed corporate earnings and economic data with yesterday's strong gains.

Markets are also awaiting earnings reports out from technology big players Facebook and Apple in the States.

Chris Beauchamp, a Market Analyst at IG (LSE: IGG.L - news) , said: "ARM served up a nice appetiser to Apple's figures this evening, posting a 10% rise in its pre-tax profits. However, the reaction among traders was a negative one, because of slower growth in the smartphone market.

"Apple's results tonight will arguably be the bigger driver here, particularly if there are real signs that iPhone penetration in China is beginning to gain traction."

Ishaq Siddiqi, Market Strategist at ETX Capital believes analysts are anticipating an in-line to slightly stronger than expected quarter as channel checks have been suggesting relatively strong iPhone sales. However, guidance for the June quarter could lead to below-consensus top-line guidance.
The FTSE ended the session down 7.02 points at 6,674.47.

Over in Eastern Europe, Russia's Foreign Minister Sergei Lavrov has said it will respond it its interest face attack. Speaking on Russian state television, he also said the US was "running the show" in Ukraine.

That was as the US dispatched hundreds of troops to Eastern Europe for manoeuvres, which came after Kiev accused pro-Russian separatists of torturing and killing two people and shooting at one of its aircraft.

Meanwhile, back in the UK it was today revealed that British manufacturers are feeling their most optimistic since 1973. The Confederation of British Industry's (CBI's) total orders index fell to -1 in April from a reading of 6 in the month before, according to the lobby group's Industrial Trends Survey. The consensus estimate had been for a reading of 7.

However, business optimism amongst manufacturers registered its sharpest rise since 1973 thanks to strong order bookings, the CBI added.



In other UK news, public sector net borrowing slipped to £6.7bn in March, from £8.8bn in the month before, according to the latest figures from the Office for National Statistics.

The equivalent year-ago figure was £11.4bn and the consensus estimate for this month £11bn.

Meanwhile, the UK government has granted approval for eight major renewable energy projects as part of its wider energy reform plans, it was revealed this morning.

The projects, which will provide power to as many as 3m homes, will each be granted a Contract for Difference (CfD), under which prices for renewable energy suppliers are essentially guaranteed. The reforms will, however, add around 2% to household bills in the next six years.

MPC (KOSDAQ: 050540.KQ - news) minutes show rise in Bank Rate unlikely over next year

The minutes of the Monetary Policy Committee's (MPC) last rate-setting meeting showed that the decision to keep the current monetary policy settings unchanged was supported by the full majority of its members, with nine having voted in favour of no change and none having voted against.

The minutes also stated that a "range of opinions" remained on the amount of existing slack in the economy. That would suggest that there are differences of opinion in how long they expect the second stage of 'forward guidance' to apply.

ABF rises US expansion plans, broker upgrade

Associated British Foods (LSE: ABF.L - news) was in the top spot on the FTSE 100 after the company announced its intention to expand its fast-growing Primark brand into the US towards the end of next year.

Panmure Gordon upgraded its rating for the stock from 'hold' to 'buy'. saying: "This is sooner than we had anticipated, and whilst Primark will continue its measured approach to expansion, in our view this significantly increases the growth potential of Primark." Interim results from the company also came in ahead of forecasts.

The potential value of AstraZeneca (NYSE: AZN - news) 's (AZN) drug pipeline is still under-appreciated by the market, with or without a bid from US pharmaceutical peer Pfizer (NYSE: PFE - news) , according to Citigroup (NYSE: C - news) , comments which helped push the stock firmly into positive territory.

The bank upgraded its rating for the stock from 'neutral' to 'buy' and hiked its target price for the shares from 3,500p to 4,900p. Citi sees an "extreme undervaluation" of AZN's early- to mid-stage oncology pipeline and estimates at least 26% upside to consensus earnings per share after 2017.

Royal Mail (Other OTC: ROYMF - news) was also a strong gainer. The company yesterday had its rating raised by Bank of America Merrill Lynch to "buy" from "neutral".

Meanwhile, Antofagasta (Other OTC: ANFGF - news) was trading firmly in the red after going ex-dividend, meaning that from today new investors won't be able to obtain the company's latest payout.

High street sporting goods retailer Sports Direct (Frankfurt: A0MK5S - news) was also lower after seeing a slight slowdown in growth in the fourth quarter. The company also warned of "further uncertainty" arising from its decision to cancel a controversial bonus payout to founder Mike Ashley earlier this month.

Shares in renewable energy provider Drax lost more than 13% of their value on Wednesday, hit by the group's announcement that one of its power station units was no longer deemed eligible by the UK government for an investment contract.



FTSE 100 - Risers
Associated British Foods (ABF) 2,962.00p +8.82%
Admiral Group (LSE: ADM.L - news) (ADM) 1,408.00p +3.30%
Bunzl (Frankfurt: BUZ1.F - news) (BNZL) 1,654.00p +2.35%
AstraZeneca (EUREX: AZNF.EX - news) (AZN) 4,042.50p +2.08%
Randgold Resources Ltd. (RRS) 4,700.00p +2.06%
Royal Mail (RMG (Brussels: ROU.BR - news) ) 532.00p +1.92%
Resolution Ltd. (RSL) 295.80p +1.89%
Experian (EUREX: EXPF.EX - news) (EXPN) 1,127.00p +1.81%
Tesco (Frankfurt: TS3.F - news) (TSCO) 297.35p +1.69%
Wolseley (Frankfurt: 24W2.F - news) (WOS) 3,417.00p +1.67%

FTSE 100 - Fallers
Antofagasta (LSE: ANTO.L - news) (ANTO) 796.50p -5.68%
Centrica (Frankfurt: CENB.F - news) (CNA (SES: E2:5GC.SI - news) ) 330.60p -4.15%
Hargreaves Lansdown (LSE: HL.L - news) (HL.) 1,197.00p -4.01%
Sports Direct International (Other OTC: SDISY - news) (SPD) 797.00p -3.98%
Old Mutual (Other OTC: ODMTY - news) (OML) 196.00p -3.92%
Morrison (Wm) Supermarkets (MRW) 196.70p -3.63%
Coca-Cola HBC AG (CDI) (CCH) 1,466.00p -3.43%
Rolls-Royce Holdings (RR.) 1,030.00p -2.83%
ARM Holdings (LSE: ARM.L - news) (ARM) 956.00p -2.75%
Ashtead Group (LSE: AHT.L - news) (AHT) 877.00p -2.61%

FTSE 250 - Risers
Spirent Communications (Other OTC: SPMYY - news) (SPT (Taiwan OTC: 8431.TWO - news) ) 104.00p +7.66%
Fenner (FENR) 415.00p +6.41%
Centamin (DI (KSE: 003160.KS - news) ) (CEY) 55.95p +5.77%
Petra Diamonds Ltd (LSE: PDL.L - news) .(DI) (PDL) 156.20p +3.65%
Merlin Entertainments (Other OTC: MIINY - news) (MERL) 363.60p +3.24%
Just Retirement Group (JRG) 154.40p +3.14%
Thomas Cook Group (TCG) 178.00p +2.53%
RPS Group (LSE: RPS.L - news) (RPS) 313.00p +2.32%
Alent (LSE: ALNT.L - news) (ALNT) 316.40p +2.23%
Ophir Energy (Other OTC: OPGYF - news) (OPHR) 230.00p +2.22%

FTSE 250 - Fallers
Drax Group (LSE: DRX.L - news) (DRX) 657.50p -13.09%
Tullett Prebon (LSE: TLPR.L - news) (TLPR) 293.50p -5.96%
Ocado Group (Other OTC: OCDGF - news) (OCDO) 352.30p -5.80%
Balfour Beatty (Other OTC: BAFYY - news) (BBY) 286.90p -4.30%
Imagination Technologies Group (IMG) 183.80p -3.87%
Moneysupermarket.com Group (MONY) 179.40p -3.86%
NMC Health (LSE: NMC.L - news) (NMC) 480.00p -3.75%
Heritage Oil (Other OTC: HGOCF - news) (HOIL) 257.30p -3.60%
CSR (Frankfurt: GQY.F - news) (CSR (LSE: CSR.L - news) ) 648.00p -3.57%
Cranswick (CWK) 1,247.00p -3.18%

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