- Chinese stimulus comes in below expectations
- ECB maintains interest rate
- March UK services sector unexpectedly slows

techMARK 2,770.71 -0.44%
FTSE 100 6,649.14 -0.15%
FTSE 250 16,349.06 -0.41%

UK stocks settled modestly lower on Thursday as investors weighed up Chinese stimulus measures, details from the latest meeting of the European Central Bank (ECB) and UK services data.

The FTSE 100 closed 9.90 points lower at 6,649.14.

Miners weighed heavily on the footsie as they tracked metal prices lower after China's new modest stimulus package fell short of expectations of something bigger.

Chris Beauchamp, a Market Analyst at IG, commented that "fleeting gains and losses have been the order of the day in London, with the mining sector acting as a dead weight on the FTSE 100".

He continued: "'Buy the rumour, sell the fact' was back in operation after several days of talk surrounding Chinese stimulus. When the actual news arrived, the reaction was one of studied disappointment, and we're seeing the sector broadly in the red as the day continues.

"Some disappointment over a lack of action by the ECB has set in as well, and we've seen the broader index drop back below 6,650 as the first sustained period of weakness for around a week sets in."

QE discussed at latest policy meeting, says Draghi

The central bank decided to maintain interest rates at a record low of 0.25%, as expected by most analysts.

ECB President, Mario Draghi, said the decision to keep policy on hold was unanimous, but policymakers held a "wide and rich discussion" on quantitative easing (QE).

The interest rates on the marginal lending and deposit lending facilities were held at 0.75% and 0%, respectively.

The ECB has been under pressure to tackle falling inflation with stimulus measures as it fell to 0.5% year-on-year in March from 0.7% in February, well below the target of just below but close to 2%.

UK services unexpectedly slows in March

Meanwhile, UK services activity unexpectedly eased in March to its slowest pace since last June.

The Markit/CIPS services purchasing managers' index (PMI) fell to 57.6 in March from 58.2 in February, below forecasts for the reading to remain unchanged. Growth in new business and employment also eased.

The PMI composite, which includes services and manufacturing activity, dropped to 57.6 in March from 58.2 a month earlier. Economists had predicted a reading of 58.1. However, the figures remained about 50, the level that signals expansion, pointing to solid economic growth.

Over in the US, the ISM's services purchasing managers' index rose to 53.1 in March from 51.6 a month ago, slightly less than the 53.5 expected by economists.

Also in the States, the trade deficit worsened to $42.3bn in February, following a reading of $39.3bn for the month before, the Bureau of Economic Analysis said today. Economists' expectations were for a negative print of $38.5bn.

Tullow Oil lifted by UBS upgrade

Tullow Oil shares were making decent gains after UBS upgraded the stock from 'neutral' to 'buy'. The bank said that the investment case for the shares has changed and the risk/reward balance is 'now skewed to the upside'.

B&Q and Screwfix owner Kingfisher was higher after revealing that it is in exclusive negotiations to buy French home improvement retailer Mr Bricolage, which would add a third business to its two existing brands in the country.

SABMiller was helped up by Numis Securities's decision to reiterate its 'add' rating on the drinks giant.

Meanwhile, British Sky Broadcasting's share price took a knock today after analysts at HBSC said that the recent rally suggests that 'significant risks' are being overlooked. The bank kept an 'underweight' rating on the broadband and pay-TV group, while the target price for the shares has been cut from 610p to 600p.

The stimulus measures from China drove Rio Tinto, Anglo American, Polymetal and Evraz all firmly lower.

Specialist healthcare group BTG rose strongly after saying it expects full-year sales to be at the top end of guidance after a 'transformational year'.

Homeware retailer Dunelm also gained after total revenue for the third quarter grew nearly 10%. The company said that with opportunities to expand its portfolio it is confident in its growth prospects.


FTSE 100 - Risers
Tullow Oil (TLW) 800.00p +6.24%
Aberdeen Asset Management (ADN) 433.50p +4.46%
Burberry Group (BRBY) 1,432.00p +3.02%
Kingfisher (KGF) 444.20p +3.01%
SABMiller (SAB) 3,070.50p +2.45%
Next (NXT) 6,755.00p +1.89%
Carnival (CCL) 2,355.00p +1.60%
Sports Direct International (SPD) 916.00p +0.99%
Associated British Foods (ABF) 2,782.00p +0.94%
Rexam (REX) 495.00p +0.75%

FTSE 100 - Fallers
British Sky Broadcasting Group (BSY) 892.50p -2.88%
Royal Mail (RMG) 550.50p -2.05%
Severn Trent (SVT) 1,818.00p -1.99%
Royal Bank of Scotland Group (RBS) 316.90p -1.86%
Rio Tinto (RIO) 3,316.00p -1.81%
Anglo American (AAL) 1,516.50p -1.78%
Mondi (MNDI) 1,054.00p -1.77%
BAE Systems (BA.) 407.20p -1.50%
Standard Chartered (STAN) 1,264.50p -1.29%
Experian (EXPN) 1,080.00p -1.28%

FTSE 250 - Risers
ITE Group (ITE) 207.10p +9.29%
Just Retirement Group (JRG) 146.20p +5.87%
Oxford Instruments (OXIG) 1,347.00p +5.07%
Imagination Technologies Group (IMG) 221.60p +3.94%
International Personal Finance (IPF) 550.50p +3.87%
Dunelm Group (DNLM) 1,006.00p +3.55%
Centamin (DI) (CEY) 53.60p +3.08%
JD Sports Fashion (JD.) 1,681.00p +2.50%
Premier Oil (PMO) 297.70p +2.48%
Crest Nicholson Holdings (CRST) 412.60p +2.38%

FTSE 250 - Fallers
Polymetal International (POLY) 605.00p -5.17%
Infinis Energy (INFI) 225.30p -4.33%
Petra Diamonds Ltd.(DI) (PDL) 151.00p -3.64%
Supergroup (SGP) 1,651.00p -3.45%
NMC Health (NMC) 504.00p -2.98%
Carphone Warehouse Group (CPW) 328.90p -2.75%
Vedanta Resources (VED) 898.50p -2.65%
Evraz (EVR) 76.00p -2.63%
Heritage Oil (HOIL) 242.00p -2.62%
St. Modwen Properties (SMP) 387.00p -2.52%

NR

Related share prices
Anglo American (AAL) share price
British Sky Broadcasting Group (BSY) share price
Kingfisher (KGF) share price
Rio Tinto (RIO) share price
SABMiller (SAB) share price
Tullow Oil (TLW) share price
Polymetal International (POLY) share price
Evraz (EVR) share price