By Barbara Kollmeyer, MarketWatch
BOE inflation report, Greek headlines in spotlight
MADRID (MarketWatch) -- Stocks were struggling in London on
Wednesday, with commodity names such as Tullow Oil PLC leading the
downside, while ARM Holdings PLC surged on its own results.
Also ahead for investors are the Bank of England's quarterly
inflation report and the wait for more news on Greece. The FTSE 100
was flat at 6,823.48, on the heels of a 0.1% loss for Tuesday.
Shares of Tullow Oil dropped 2.2% after the Africa-focused oil
explorer said Wednesday it swung to a loss for 2014 and would
suspend its dividend. "2014 was a difficult year for our industry
and a challenging one for Tullow, as our results today
demonstrate," Chief Executive Aidan Heavey said in a statement.
Other names in the commodity space were also on the decline,
similar to Tuesday. Heavyweight BP PLC (BP) dropped 1%, and Royal
Dutch Shell PLC (RDSB) (RDSA) fell 0.5%.
Stocks in mining companies Anglo American PLC and BHP Billiton
PLC were each off 2%.
Broadcaster Sky PLC slid over 5%. On Tuesday, the company said
it would retain Premier League Soccer TV rights, but analysts were
fretting about the very high price the company is paying -- up 70%
a game, well above consensus estimates on what they would pay.
"While Sky says it can absorb extra cost to keep consensus
unchanged, this takes away future investment/wiggle room and
highlights unrelenting content-cost pressure," said analysts at
Investec Securities Research, who rate the company reduce and said
they are reviewing their forecasts and target prices.
A bright spot in London was ARM Holdings (ARMHY), surging nearly
4% after the British microchip designer, who counts Apple Inc.
(AAPL) as one of its customers, said it swung to a net profit in
the fourth quarter on strong royalty revenue. ARM is also lifting
its dividend to 4.5 pence (6.9 cents), pushing up its full 2014
dividend by 23% to 7 pence.
Shares of Reckitt Benckiser Group PLC surged 4% as the
consumer-goods company announced a new cost-cutting plan and lifted
its share-buyback program as it reported a rise in full-year
earnings.
Investors in London will be on the lookout for the Bank of
England to slash its inflation forecasts to near zero levels and
state the likelihood of inflation falling into negative territory,
said analysts at FXStreet on their website. "Moreover, the bank is
likely to avoid sounding hawkish at a time when most other central
bankers across Europe are reducing interest rates to record lows,"
said the analysts.
The Greek government's bailout program and appeal for fresh aid
are due to be discussed at Wednesday's emergency meeting of
Eurogroup finance ministers. On Tuesday evening, Greece's
government won a confidence vote on its plans in parliament.
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