30th Nov 2015 16:59
LONDON (Alliance News) - The FTSE 100 spent most of Monday trading largely flat but ended the session lower with a sharp fall just before the close, meaning the UK's blue-chip stock index ended November in the red.
The FTSE 100 was set to post a modest gain for November, but ended the month down 0.1% after closing down 0.3% on the day at 6,356.09 points amid the late sell-off. The FTSE 250 outperformed its large-cap peer on the day and the month. The midcap index closed Monday up 0.9% at 17,420.70, its highest close since mid-August and meaning it ended the month up 1.8%. The AIM All-Share closed up 0.7% at 737.32 but ended down 0.1% for November as a whole.
European stocks ended much higher, with investors expecting a bumper stimulus package from the European Central Bank on Thursday. The CAC 40 in Paris ended up 0.6% and the DAX 30 in Frankfurt closed up 0.8%.
"Germany's listed exporters stand to gain the most from looser ECB policy indirectly aimed at weakening the euro," said Jasper Lawler, market analyst at CMC Markets.
Meanwhile, inflation in Germany rose for a second consecutive month in November and at the fastest pace in five months, preliminary figures from Destatis showed.
The German consumer price index climbed 0.4% year-on-year following a 0.3% increase in October. The print was in line with economists' expectations. The latest inflation figure was the highest since May, when it was 0.7%.
The euro rose against the dollar after the data and at the London close was quoted at USD1.0566.
The dollar also fell against other major currencies after a disappointing round of data. Firstly, Chicago-area business activity unexpectedly contracted in the month of November, according to a report released by MNI Indicators.
The report said the Chicago Business Barometer tumbled to 48.7 in November from 56.2 in October, with a reading below 50 indicating a contraction in regional business activity. Economists had expected the index fall only slightly to 54.0.
Following the miss in the Chicago Business Barometer, growth in US pending home sales came in below forecasts. The National Association of Realtors said its pending home sales index inched up by 0.2% to 107.7 in October from an upwardly revised 107.5 in September. Economists had expected the index to climb by 1.0%.
At the London close, the pound traded at USD1.5051. On Wall Street, the Dow 30, S&P 500 and Nasdaq Composite indices all traded down 0.3%.
Mining stocks were amongst the best performers after a rebound in copper prices. Antofagasta closed up 2.2%, and Anglo American ended up 1.5%.
Gold recovered from hitting a near six-year low on Friday at USD1,052.64 an ounce and traded at USD1,062.47 an ounce at the London close. Brent oil was quoted at USD45.32 a barrel.
BHP Billiton was a notable exception to the mining sector rally and closed down 1.4% at 796.66 pence, having hit a seven-year low at 755.00p earlier in the session.
The Anglo-Australian miner and Brazilian partner Vale said a total of 13 fatalities have been recorded so far after the pair's tailings dam in Brazil burst earlier this month, as the clean up operation commences. The pair each own a 50% stake in the Samarco joint venture, which was responsible for the Fundão dam which burst in early November. A further six people are still missing.
On Friday, the Brazilian federal government tabled plans to sue BHP and Vale for causing what it called an environmental catastrophe in the region. On Monday, the two companies said they are still committed to establishing a separate, voluntary, non-profit fund to support the recovery of the Rio Doce river system, which was flooded by the dam burst.
Aberdeen Asset Management ended down 4.4%, making it the worst blue-chip performer. The emerging markets-focused investment manager reported stable profit in its last financial year, as weak investor sentiment towards Asia and emerging markets in general weighed on its results, with heavy net outflows hitting assets under management.
Pretax profit fell to GBP353.7 million in the year ended September 30, compared with GBP354.6 million the prior year. Assets under management fell to GBP283.7 billion on September 30 from GBP324.4 billion at the same stage the prior year, as Aberdeen saw net outflows of GBP33.88 billion over the year as a whole. Net outflows were highest in the fourth quarter, which accounted for 38% of the total at GBP12.69 billion.
Aberdeen Chief Executive Martin Gilbert said the current weakness in emerging markets has "some way to run", but believes the long-term fundamentals remain compelling for patient investors. Responding to persistent takeover speculation, Gilbert told journalists on a conference call Monday: "We're not for sale and have never approached anyone to be sold."
Takeover speculation made InterContinental Hotels Group was one of the best performers in the FTSE 100 for most of the day, closing up 2.4%. Chinese bidders are understood to be eyeing a bid for the hotel operator after rival Starwood Hotels & Resorts Worldwide agreed to be acquired by Marriott, another hotel industry player, The Daily Telegraph reported.
City sources told the newspaper that IHG has been left vulnerable by the merger of Starwood and Marriott, and three Chinese suitors - including Shanghai Jin Jiang International Hotels Group, airline owner HNA Group and sovereign wealth fund China Investment Corp - all were understood to have run the rule over Starwood prior to the deal.
Petra Diamonds stormed to the top of the FTSE 250 gainers list late in the session after it said its lender group has agree to waive the measurement of two covenant tests related to consolidated earnings before interest, tax, depreciation and amortisation for the period to, and as at, December 31.
The lender group, which includes Absa Bank Ltd, FirstRand Bank Ltd and Nedbank Ltd, has advised the company it remains "very supportive" of it, and its expansion plans. Petra closed up 10%.
Petra shares also had spiked on Friday after the company said it had recovered a 23.16 carat pink diamond of "exceptional colour and clarity" from its Williamson mine in Tanzania. Petra said this is the "most significant recovery" from the mine to date.
Pork and poultry producer Cranswick, up 5.7%, said its pretax profit ticked higher in the first half, held back slightly by an impairment charge, as revenue came in slightly ahead of its expectations.
Cranswick said its pretax profit for the six months to the end of September was GBP25.5 million, 3.0% higher than the GBP24.6 million it posted a year earlier and held back somewhat by a GBP4.6 million goodwill charge the company booked on its sandwiches business. It said it will pay an interim dividend of 11.6 pence per share, up from 10.6p.
TalkTalk Telecom Group was one of the worst performers in the index, down 1.7% after Berenberg downgraded it to Sell from Hold. The investment bank said TalkTalk's plans to improve margins face significant challenges, made more difficult by the recent cyber attack on the telecommunications company.
In the economic calendar Tuesday, there are Chinese manufacturing and non-manufacturing purchasing managers' indexes at 0100 GMT, Nikkei Manufacturing PMI for Japan at 0235 GMT, before the Caixin manufacturing PMI for China is at 0245 GMT.
Later in the day there are a raft of Markit manufacturing PMI readings from France at 0850 GMT, Germany at 0855 GMT, the eurozone at 0900 GMT, the UK at 0930 GMT, and the US at 1445 GMT. German unemployment will be released at 0855 GMT while the UK Financial Stability Report is released at 0930 GMT.
In the US, there is the ISM manufacturing PMI at 1445 GMT, just before construction spend at 1500 BST.
In the UK corporate calendar, there is a trading statement from FTSE 100-listed theme park operator Merlin Entertainments, while vehicle rental company Northgate reports full-year results, together with kitchen and bathroom tile and flooring retailer Topps Tiles and exhibitions company ITE Group. The Bank of England will publish the results of its stress tests on UK banks at 0700 GMT.
By Neil Thakrar; [email protected]; @NeilThakrar1
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