18th Apr 2016 07:15
LONDON (Alliance News) - The least surprising news from the weekend was having the biggest impact on share prices early Monday.
Oil stocks BP and Royal Dutch Shell were among the leading decliners in a sharply lower FTSE 100 index, after oil producers meeting in Qatar failed to reach an agreement to freeze oil production.
Japanese stocks started the day's declines, after an earthquake hit the southern Japanese island of Kyushu, forcing Toyota Motor among others to suspend production. A powerful earthquake also hit Ecuador, killing at least 272 people.
Meanwhile, a drone struck a British Airways jet landing at Heathrow airport.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 1.3% at 6,264.36
FTSE 250: down 0.7% at 16,784.74
AIM ALL-SHARE: down 0.1% at 730.91
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Hang Seng: down 1.3% at 16,275.95
Nikkei 225: closed down 3.4% at 16,275.95
DJIA: closed down 0.2% at 17,897.46
S&P 500: closed down 0.1% at 2,080.73
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GBP: down at USD1.4137 (USD1.4186)
EUR: soft at USD1.1290 (USD1.1308)
GOLD: up at USD1,235.80 per ounce (USD1,230.90 )
OIL (Brent): down at USD40.66 a barrel (USD42.80)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
(all times in BST)
13:30 US Fed's William Dudley speech
15:00 US NAHB Housing Market Index
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Top oil producers Sunday delayed an agreement to freeze the crude output levels to shore up low prices, saying they needed "more time for further consultations". The decision followed marathon talks in the Qatari capital Doha from which OPEC member Iran stayed away. Qatar's Energy and Industry Minister Mohammed bin Saleh said at a press conference that participants in the meeting had agreed on the need for more time for discussion. He did not give details. The minister added that OPEC members would meet in Vienna in June to consider a possible freeze. However, he ducked questions about whether Iran was to blame for failure to reach the deal.
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Thousands of oil workers in Kuwait started an open-ended strike on Sunday to protest at planned government cutbacks as the OPEC country is struggling with low crude prices. Nearly 7,000 workers, making up about 47% of Kuwait's total oil employees, have joined the strike, some protesters told dpa. The stoppage prompted the state-run Kuwait National Petroleum Co to implement an emergency plan.
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Many evacuees were facing shortages of relief supplies, and local transport was severely disrupted after two powerful earthquakes rocked the southern Japanese island of Kyushu, killing at least 42 people, local media reported Monday. Evacuees in some rural areas of Kumamoto prefecture have received only limited supplies of water, food and other daily necessities, the local Nishinihon newspaper reported. No abnormalities were detected at four nearby nuclear power stations, the government said. The two major quakes last week were the strongest since the earthquake and ensuing tsunami in north-eastern Japan on March 11, 2011.
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Ecuador's strongest earthquake since 1979 killed at least 272 people, caused widespread damage and prompted the government to deploy thousands of soldiers to the quake zone. The 7.8-magnitude tremor that struck Saturday evening some 170 kilometres north-west of the capital Quito also left more than 2,500 injured, President Rafael Correa said late Sunday, according to media reports.
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Brazil's lower house of parliament late Sunday voted with the necessary two-thirds majority to impeach President Dilma Rousseff. There were frenetic scenes of celebration by opponents of the president in parliament when the decisive 342nd vote was cast. Each member explained his or her vote in a short statement, meaning that the emotional vote took more than five hours to reach its conclusion. Rousseff has been under pressure to resign for months, accused of hiding the extent of the budget deficit during her re-election campaign at the end of 2014. If a simple majority in the Senate votes against her, Rousseff will be suspended for 180 days.
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The average asking price for a house in the UK was up 1.3% on month in April, property tracking website Rightmove said on Monday, climbing to a record GBP307,033. That follows the 1.3% increase in March. Among the individual components of the survey, prices in London were up just 0.3% - the slowest of any region as buyers have looked to the suburbs in recent weeks, Rightmove said. On a yearly basis, prices advanced 7.3% after rising 7.6% in the previous month.
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Home prices in majority of the Chinese cities increased again in March, figures from the National Bureau of Statistics showed. Compared to the previous month, house prices rose 62 cities out of 70 surveyed by the government. It fell in remaining 8 cities.
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Several Chinese ministries have announced plans to help people laid off from the steel and coal industries, amid massive overcapacity and an effort to shift the world's second-largest economy away from manufacturing, a report said Sunday. The suggestions from seven ministries, including the Ministry of Human Resources and Social Security, put an emphasis on retraining workers to help them enter other fields, state-run Xinhua news agency reported.
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The Russian military on Sunday dismissed reports of a dangerously close encounter between a US reconnaissance plane and a Russian jet over the Baltic Sea as "not true to reality". A spokesman for the US European Command, responding to a question from CNN, had accused the Russian Su-27 of performing "erratic and aggressive manoeuvres" as it got within 15 metres of the US aircraft.
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The Group of 20 major advanced and emerging economies are calling for "all countries and jurisdictions" to meet global standards for financial and tax transparency by mid-2017. The G20 called for "objective criteria" for identifying "non-cooperative jurisdictions," in a joint statement issued Friday in Washington on the sidelines of the spring meetings of the World Bank and International Monetary Fund.
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Greece must continue to implement reforms to put its towering debts on a sustainable path, German Finance Minister Wolfgang Schaeuble said Saturday, on the sidelines of the International Monetary Fund's spring meetings in Washington. "Greece can and must still do more," he said. Athens must cut a further EUR5.4 billion to keep government finances in line with the most recent rescue package, agreed last year with Greece's international creditors.
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BROKER RATING CHANGES
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JEFFERIES CUTS ARM HOLDINGS TO 'HOLD' (BUY) - PRICE TARGET 923 (1140) PENCE
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BERENBERG RAISES THOMAS COOK TO 'HOLD' ('SELL') - TARGET 105 (100) PENCE
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TRADERS: CITIGROUP RAISES LANCASHIRE HOLDINGS TO 'BUY' ('NEUTRAL')
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TRADERS: RBC CAPITAL CUTS SPIRAX-SARCO TO 'SECTOR PERFORM' ('OUTPERFORM')
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TRADERS: CITIGROUP CUTS POLYMETAL TO 'SELL' ('NEUTRAL')
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CITIGROUP CUTS SOUTH32 TO 'NEUTRAL' ('BUY') - TARGET 85 (75) PENCE
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COMPANIES - FTSE 100
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UK power company Centrica said it is on track to meet its targets for 2016 following a solid performance in the first quarter. Centrica, which has both upstream and downstream oil and gas operations and which runs the British Gas consumer energy business, said it expects to deliver GBP200.0 million in efficiency savings in 2016 as part of its plan to cut GBP750.0 million in costs out of the business. Like-for-like operating costs are set to be lower in 2016 year-on-year, Centrica said, and it said around 3,000 jobs will be cut across the business over the course of 2016, 800 of which were cut in the first quarter to the end of March.
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Consumer goods company Reckitt Benckiser Group said it delivered strong like-for-like sales growth in its Health and Hygiene product portfolios in the first quarter, offset by a flat performance in its Home business and a decline in sales for its Portfolio Brands. Reckitt said like-for-like sales for its Health product business grew 11% in the quarter to the end of March. It saw good performances from its Durex range, Gaviscon heartburn relief and Strepsils throat lozenges in the quarter. Hygiene product sales were more muted, up 1.0% in the quarter.
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A British Airways flight was struck by a suspected drone as it was arriving at London's Heathrow Airport from Geneva on Sunday, police said. The Airbus A320 with 137 people on board landed safely and, following an inspection, engineers cleared it for the next flight. "An object, believed to be a drone, had struck the front of the aircraft," a Scotland Yard spokeswoman said, adding that a police investigation was underway but that no one had been arrested. British Airways is owned by International Consolidated Airlines Group.
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Budget airline easyJet is considering making a takeover offer for Monarch Airlines, a leisure carrier that has the same base, Luton airport north of London, The Sunday Times reported. The newspaper said Monarch, which came close to collapse in 2014, has appointed Deutsche Bank to examine its options. The airline is owned by Greybull Capital, the family investment fund buying Tata’s Scunthorpe steel works, The Times noted, adding easyJet is up against a range of other suitors, including China's HNA.
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UK pharmaceutical giant AstraZeneca is preparing to join the bidding for California-based drug firm Medivation Inc, according to a report in The Sunday Times. NASDAQ-listed Medivation has a market capitalisation of USD8.38 billion, and the newspaper said the prostate cancer specialist could fetch around USD10 billion.
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A consortium involving private equity group CVC Capital Partners and Qatar state-run investor Qatar Investment Authority is understood to have abandoned "secret" plans to acquire grocer J Sainsbury, Sky News reported. Sky said CVC, the QIA and Canadian property group Brookfield drew up detailed plans to acquire the group earlier this year and the plans were sufficiently advanced for the group to have been given formal approval to act as joint offeror for Sainsbury's, according to an insider. The consortium is thought to have abandoned the plan shortly after Sainsbury's struck a deal to acquire Home Retail Group, the owner of Argos, Sky said.
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Stuart Gulliver, chief executive officer of HSBC Holdings, will step down in two years as the UK bank replaces its top leadership, according to The Sunday Times. The report noted the company has started compiling a list of internal candidates and will also consider external applicants. The bank plans to appoint a new chairman first to help choose the next CEO, the Sunday Times reported, after HSBC said last month that it plans to nominate a successor to Chairman Douglas Flint next year.
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COMPANIES - FTSE 250
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Interserve said it has been awarded a five-year contract with the Ministry of Defence's Defence Infrastructure Organisation operating arm worth GBP230.0 million. The support service and construction company said under the contract it will be providing facilities services to the six US Air Force bases in the UK and their associated satellite services, combining four existing facilities support contracts.
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Temporary power provider Aggreko said it has secured a three-year power supply deal in Zimbabwe. Aggreko said its Power Solutions arm has won a three-year deal to provide 200 mega watts of diesel-fuelled power to Sakunda Holdings. Sakunda has been awarded a contract from the Zimbabwe Electricity Supply Authority, Aggreko said. No financial details on the deal were disclosed.
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COMPANIES - LONDON MAIN MARKET AND AIM
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A referendum in Italy on limiting offshore drilling rights for oil and gas failed Sunday as the necessary 50% turnout threshold for its validation was not reached, preliminary results showed. The outcome was a political victory for the government, which urged voters to abstain, and a blow to referendum backers, including environmental association and nearly all opposition parties, from right and left. Back in January, London-listed Rockhopper Exploration had said it was being forced to review its Ombrina Mare project offshore Italy after the country's parliament reintroduced restrictions on activity near the coast.
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Stock Spirits Group said Chief Executive Chris Heath will step down with immediate effect and take early retirement. Heath's departure comes ahead of the company's annual general meeting, due to take place on May 23, at which shareholders were due to vote on the his removal. Heath will be replaced by Miroslaw Stachowicz, an independent non-executive director on the company's board since November 2015. Stachowicz is the non-executive vice-chairman of Harper Hygienics, a Polish hygiene products company.
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NewRiver Retail said it has paid GBP120.3 million for the Broadway shopping centre and Broadway Square in Bexleyheath, south-east London, in its largest single asset acquisition to date. The retail property investor said the acquisition equates to a net initial yield of 6.7% and an equivalent yield of 7.0%, with net rental income of GBP8.2 million per annum.
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Spirent Communications said it has poached Paula Bell of John Menzies as its new chief financial officer, to join its board September 5. Bell will leave her role as chief financial officer of John Menzies at the end of July, and will be succeeded by Giles Wilson, currently senior vice president of John Menzies' Middle East, India and African regions.
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Contracts-for-difference trading platform Plus500 said revenue grew substantially in the first quarter as market volatility proved conducive to signing up new customers. Plus500 said its revenue for the first quarter grew to USD85.2 million, up 26% on the USD67.7 million in revenue made in the fourth quarter of 2015 and up 3.8% from USD82.1 million a year earlier.
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COMPANIES - INTERNATIONAL
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Toyota Motor said that it will suspend production on its vehicle assembly lines in stages between April 18 and 23, due to parts shortages resulting from the severe earthquakes that struck Japan's island of Kyushu on Thursday and after. Decisions regarding recommencement of operation at plants in Japan will be made on the basis of availability of parts.
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Alibaba Group and New Zealand Trade and Enterprise, the New Zealand Government's international business development agency, signed a MOU to broaden Alibaba's existing partnership with New Zealand Trade and Enterprise. Under the MOU, Alibaba will provide support for New Zealand companies to enter the Chinese consumer market through its various e-commerce channels.
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Monday's Scheduled AGMs/EGMs
PetroNeft Resources (re proposed board changes)
Cairn Homes (re open offer)
Centrica
Jupiter Global Trust (re amend & restate company's investment policy)
Fastnet Equity
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By Tom Waite; [email protected]; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
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