London shares lose ground in early trade on Thursday as firming oil prices and solid resources and financials fail to offset news of weakening demand on Britain's high streets. The FTSE 100 index nudges around 20 points lower, or 0.3%, to 6,392, bucking the more positive trends across European bourses and on Wall Street overnight.
UK retail sales fell much more than expected in March, with food and clothing sales all weaker, according to the latest data from the Office for National Statistics. Retail sales dropped 1.3% compared with February, which was much steeper than the 0.1% forecast by economists.
IN corporate news, pay-TV outfit Sky (SKY) falls 3.2% to 995p, heading the Footsie loser board, as the market looks beyond the solid headline numbers in its third quarter update and looks to the increasing number of subscribers who are leaving. In the UK, more limited discounting sees churn increase 60 basis points to 10.7%, its highest level in 18 months.
Oil prices are recovering as the Independent Energy Agency says 2016 will see the biggest fall in non-OPEC production 'in a generation'. Premier Oil (PMO) and Enquest (ENQ) - highly leveraged to the oil price because of their levels of debt - see gains of 7% to 34.5p and 6.4% to 58p respectively.
Engineering conglomerate Smiths (SMIN) gains 5% to £11.65 on news it is acquiring California-based detection and security solutions company Morpho Detection for £492 million. Smiths says the deal strengthens its ability to compete in the growing global threat detection market and will deliver $30 million of annual cost synergies by the third year following completion.
Bookmaker Ladbrokes (LAD) adds 1.6% to 118.4p after reporting a 10.6% rise in group net revenue in the three months to 31 March, despite the Cheltenham horse racing festival being 'the worst in living memory'. The group says it remains confident of the case for its merger with Gala Coral, which it agreed last July.
European white goods retailer Darty (DRTY) rises 14.1% to 150p as the bid war for the electricals purveyor heats up. French retailer Groupe Fnac (FNAC:PA), which originally proposed a takeover offer last year, is back with a new premium-priced bid that trumps the increased offer lodged by Conforama, part of South African retail conglomerate Steinhoff International (SNH:SJ), after the market close last night.
Pet food-to-veterinary services play Pets At Home (PETS) perks up 3.2% to 247.3p after assuring full-year pre-tax profits will be in-line with the £93 million-to-£97 million range. New CEO Ian Kellett announces 3.2% like-for-like growth in the final quarter and flags positive momentum in the merchandise business as well as an 'excellent performance in both our vet practices and grooming salons'.
In the small cap space, United Carpets (UCG:AIM) weaves a 14.6% gain to 12.75p on news results for the year to March will beat market expectations, the improved trading seen in the first half having continued into the second half-year. SHARES recently highlighted the stock's growth and income attractions and broker Cantor Fitzgerald Europe has raised its pre-tax profit estimate by 11% to £1.45 million on the news.
Specialist drilling contractor Greka Drilling (GDL:AIM) - a spin-off from Chinese coal bed methane specialist Green Dragon Gas (GDG) - falls 11.1% to 4p as it reports a widened loss for 2015 of $7.5 million.
Elsewhere Indonesian palm oil-to-Aussie beef cattle producer M.P. Evans (MPE:AIM), whose attractions we highlight in the small caps section of today's new SHARES Magazine, is marked up 7% (29.5p) to 450p. Noting 'recent media speculation' in relation to NAPCo, its sole remaining Australian investment, M.P. Evans says it 'continues to review any potential strategic opportunities with regard to this holding, including a possible sale' and will 'keep the market informed as appropriate'.
Chinese lottery technology provider DJI (DJI:AIM) slides 5% to 65.5p after signing a deal with news agency Xinhua to create a mobile app enabling payments of utility bills, mobile phone top-ups and traffic fines. It will be funded by a £10.5 million share placing.
