(Alliance News) - Stocks in London were in the red early Tuesday despite oil majors getting a boost from soaring energy prices.
The FTSE 100 index was down 57.16 points, or 0.8%, at 7,554.07 early Tuesday. The mid-cap FTSE 250 index was down 231.85 points, or 1.0%, at 22,639.79. The AIM All-Share index was down 5.84 points, or 0.5%, at 1,160.91.
The Cboe UK 100 index was down 0.7% at 749.86. The Cboe 250 was down 0.9% at 20,315.55, and the Cboe Small Companies up 0.1% at 15,858.85.
In mainland Europe, the CAC 40 in Paris was down 1.1% while the DAX 40 in Frankfurt was down 1.0% early Tuesday.
Unable to boost the FTSE 100 were oil majors BP and Royal Dutch Shell, rising as Brent prices spiked. BP shares were up 1.0%, while Shell 'A' and 'B' shares were up 0.8% and 0.7% respectively.
Brent oil was trading at USD87.77 a barrel, higher than USD86.01 late Monday and trading around its best levels since 2014.
"Restricted global supply, renewed optimism on the mildness of Omicron and recent geopolitical tensions have been the primary drivers for the move higher in oil in recent weeks. Our base remains that the oil price will stabilise and eventually move lower later this year on a stronger USD, OPEC+ normalising supply and on the global economic policy tightening weighing on demand," said Danske Bank.
Gold was quoted at USD1,813.81 an ounce early Tuesday, lower from USD1,818.80 on Monday.
The internationally-exposed FTSE 100 was, however, avoiding the steeper losses seen in mainland Europe due to a weaker pound. Sterling was quoted at USD1.3635 early Tuesday, lower than USD1.3650 at the London equities close on Monday despite some solid UK jobs data.
The UK unemployment rate unexpectedly edged down to 4.1% in the three months to November, having been forecast by analysts to remain steady at 4.2% for the three months to October.
But annual growth in total pay - or including bonuses - was 4.2% for the three months to November, and regular pay, which strips out bonuses, rose 3.8%. Both were below the annual UK inflation rate for November, which was 5.1%.
These wage growth figures were as expected and marked a slowdown from the previous month, when growth had been 4.9% and 4.3% respectively.
In the FTSE 250, Marshalls shares rose 4.6% after saying it expects results for 2021 to slightly ahead of previous forecasts after notching strong revenue growth.
Revenue for 2021 was GBP589 million, up both on the GBP469 million achieved in 2020 and the GBP542 million reported for pre-pandemic 2019. Revenue growth in the second half of the year was "increasingly strong", the company added.
Marshalls manufactures natural stone and concrete hard landscaping products.
"This positive trading performance across the group has been achieved despite the continued backdrop of sector-wide raw material and labour shortages...However, cost increases were recovered through a mid-year price increase and a further price increase has been implemented successfully in January 2022," said Marshalls.
As a result, it revised trading expectations for 2021 to be "slightly ahead of its previous view", and said recent trading remains positive.
THG tumbled 7.7%. The online retail platform operator reported strong revenue growth but flagged a margin hit from foreign exchange headwinds.
Fourth-quarter revenue was GBP711.7 million, up 27% on a year ago and nearly double on a two-year basis. For 2021 as a whole, revenue rose 35% to GBP2.18 billion.
However, the beauty products retailer's full-year adjusted earnings before interest, tax, depreciation and amortisation margin is expected to be in the range of 7.4% to 7.7%, compared to market expectations of around 7.9%, after taking into account 90 basis points of adverse foreign currency movements, it said.
For 2022, the margin is expected to improve throughout the year, and revenue growth is seen in a region of 22% to 25% at constant currencies, slowing from the 38% achieved in 2021.
In Asia, the Nikkei 225 index in Tokyo ended down 0.3%.
Japan's central bank revised its inflation forecast on Tuesday and adjusted its view of price risks, while leaving its monetary easing policy in place in a nod to lingering pandemic uncertainty.
In a quarterly report on prices and the economy, the Bank of Japan said it now forecasts inflation of 1.1% for the fiscal year to March 2023, up from its previous forecast of 0.9%. It also revised up its forecast for the fiscal year to March 2024 to 1.1% from 1.0%, leaving the projection for the current year unchanged.
It declared "risks to prices are generally balanced," adjusting its previous assessment of risk as "skewed to the downside."
The yen was weaker early Tuesday in London. Against the yen, the dollar rose to JPY114.67 from JPY114.60 late Monday in London.
In China, the Shanghai Composite ended up 0.8% on Tuesday, while the Hang Seng index in Hong Kong closed down 0.4%. The S&P/ASX 200 in Sydney ended down 0.1%.
The economic events calendar on Tuesday has the German ZEW survey at 1000 GMT. The euro traded at USD1.1391, softening against USD1.1405 late Monday.
By Lucy Heming; lucyheming@alliancenews.com
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