1st Jun 2015 09:47
LONDON (Alliance News) - London stocks are mixed Monday mid-morning, with Greece debt negotiations still in focus and after a flurry of PMI readings from China, Europe and the UK.
Mergers and acquisitions also are centre-stage as the new month gets underway.
The FTSE 100 is down 0.2 at 6,972.22, while the FTSE 250 is flat at 18,146.86. Meanwhile, the AIM All-Share is up 0.3% at 774.66.
UK manufacturing activity grew by less than forecast in May, data from CIPS and Markit economics showed. The report said that the seasonally adjusted purchasing manager's index climbed to 52.0 in May, slightly down from expectations for a reading of 52.8. The April reading was revised down to 51.8.
?Expectations of a broad rebound in UK economic growth during the second quarter of the year are called into question by these readings. Manufacturing looks on course to act as a minor drag on the economy, as the sector is hit by a combination of the strong pound and weak business investment spending," says Rob Dobson, senior economist at Markit.
The pound declined after the release of the manufacturing data and currently trades at USD1.5223.
European major indices also are mixed following eurozone manufacturing PMI readings from Markit. In Paris, CAC 40 is up 0.3% helped by a touch better-than-expected PMI figure of 49.4 for France, with economists expecting 49.3. Meanwhile, the DAX 30 in Frankfurt is down 0.1% after a German PMI reading of 51.1 that was below estimates for a 51.4.
Investors remain focused on Greek debt negotiations with the nation's European creditors, as officials' opinions over if and when a deal will be reached continue to create uncertainty in the stock market. Last week, European Commission President Jean-Claude Juncker said the Greek stand-off will be resolved in the ?coming days and weeks", but his comments appeared to be contradicted later by German Finance Minister Wolfgang Schaeuble, who ruled out an early breakthrough in the tortuous negotiations.
"With a deal clearly not having been reached by Sunday, Greek officials are said to have now prepared a draft agreement which is expected to be presented to creditors today," say Mike Van Dulken and Augustin Eden, analyst at Accendo Markets.
Oanda analyst Craig Erlam says Greece has been very open about the fact that it doesn?t have the cash to pay on Friday the EUR300 million owed to the International Monetary Fund. However, the analyst says it has been suggested that Greece could take all four repayments due to the IMF in June, totaling EUR1.6 billion, and pay them at the end of the month, to which the IMF has suggested it may be open.
Meanwhile, UK mining stocks are taking a hit after a report showing the manufacturing sector in China continued to contract in May. The latest manufacturing PMI reading from HSBC Bank showed a score of 49.2. That was in line with expectations, and it represented a slight upward revision from last month's flash estimate reading of 49.1. It was up from 49.9 in April, although it remains beneath the line of 50 that separates expansion from contraction in a sector.
Glencore is down 1.7% while Fresnillo is down 1.4%. Anglo American is down 1.3%, BHP Billiton is down 1.1%, and Randgold Resources is down 0.9%.
Elsewhere on the London Stock Exchange, Lloyds Banking Group is up 1.3% after UK Financial Investments said it has extended the trading plan under which it is selling the UK government's stake in the bank back to the market.
UK Financial Investments said the plan will continue to be managed by investment bank Morgan Stanley and will now run until no later than the end of December 2015. The original plan, announced last December, was due to end on June 30. The plan includes a provision that up to 15% of the aggregate total trading volume in the bank be sold over the duration of the plan.
AstraZeneca, up 1.2%, announced preliminary efficacy and safety data for AZD9291 in the first-line treatment of epidermal growth factor receptor mutation positive (EGFRm) advanced non-small cell lung cancer, or NSCLC. The company reported that the data showed that 81% of patients on a once daily dose of AZD9291 were progression free at 9 months; overall response rate was 73%.
British American Tobacco is up 0.9%. The tobacco company said it has stuck a EUR550 million deal to acquire TDR and other tobacco and retail assets from Adris Grupa to expand its central European operations. BAT said that by combining its existing businesses with TDR, it expects to boost its regional leaf-processing capabilities and strengthen its relationships with distributors and retailers in central Europe.
In the FTSE 250, Ultra Electronics Holdings is up 2.5%. The group, which provides electronic and software technology to the defence, security, transport and energy industries, said it has struck a deal to acquire the electronics products division of US-based radio frequency and microwave systems supplier Kratos Defense & Security Solutions for USD265 million.
Playtech, down 3.2%, is the worst mid-cap performer after saying it has reached a deal to acquire troubled online contracts-for-difference trading platform Plus500 in a GBP459.6 million deal. Under the deal, Playtech will pay 400 pence per share for Plus500, which has seen its revenue take a hit in recent weeks after it suspended some of its UK accounts as part of actions on its anti-money laundering processes.
Numis says is its a "good deal" for sharesholders of Plus500, whose shares are up 1.6% to 376.00p. Meanwhile, Spreadex analyst Connor Campbell says these two companies have "an interesting Israeli connection" as Playtech is owned by Israeli billionaire Teddy Sagi, whilst Plus500 has its main operations based in Israel.
In the US, Wall Street is pointed to a higher opening, with the DJIA, the S&P 500 and the Nasdaq 100 seen up 0.2%.
Still in the economic calendar Monday, Germany's consumer price index is due at 1300 BST, while in the US, manufacturing PMI is due at 1445 BST
By Daniel Ruiz; [email protected]
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
AstrazenecaAnglo AmericanLloydsBHP Billiton PLCULE.LPlus500British American TobaccoRandgold ResourcesFresnilloGlencorePlaytech