30th Aug 2016 07:35
LONDON (Alliance News) - Stocks in London were flat to higher Tuesday morning after a long holiday weekend in the UK, with gains in the FTSE 100 limited by a poor performance from its heavy-weight mining sector, while Bunzl shares were on the rise after posting a strong set of interim results.
The FTSE 100 was up 0.1%, or 2.30 points, at 6,840.35. The FTSE 250 was flat at 17,936.41 and the AIM All-Share was up 0.1% at 793.66.
Bunzl was up 2.9%, the biggest blue-chip gainer, after saying its pretax profit in the first six months of 2016 increased by 6.0% to GBP155.6 million from GBP147.1 million as revenue rose 10% to GBP3.44 billion from GBP3.15 billion. Adjusted pretax profit, which excludes certain exceptional items, came in 13% higher than last year at GBP210.6 million, compared to GBP187.0 million. Bunzl raised its interim dividend by 11% to 13.0 pence from 11.75p.
The FTSE 100 company said it has acquired two companies in Canada and agreed to by another business in Hungary. In Canada, Bunzl has purchased cleaning and hygiene product supplier Plus II Sanitation Suppliers and another firm in a similar market named Apex Sanitation Products. The financial details of the deals were not published.
Bunzl also has agreed to purchase Silwell, a Budapest-based company supplying a variety of disposable food service items. That acquisition is expected to close before the end of September.
The FTSE 350 Mining Sector index was down 2.5%, the worst sector index early Tuesday, with Antofagasta down 3.4% and Glencore down 3.2%. Gold miners also were down, tracking the precious metal's price, with Randgold Resources down 3.0% and Fresnillo down 3.1%. Gold was quoted at USD1,320.50 shortly after the open on Tuesday, compared to USD1,330.60 at the European equities close on Friday.
Anglo American said it has completed the sale of its 70% interest in the Foxleigh coal mine in Queensland, Australia, to a consortium led by Taurus Fund Management. The FTSE 100 miner, which originally announced the signing of the sale and purchase agreement for the asset on April 4, said the terms of the transaction remain confidential. The stock was down 2.5%.
Meanwhile, the chief commercial officer of BHP Billiton said the tailings dam disaster at the Samarco joint venture in Brazil last year had a "devastating impact" and said it since has reviewed how such dams are managed across its entire portfolio. The Samarco accident killed numerous people and caused damage to the area surrounding the operation back in November when a tailings dam burst. The operation is a 50:50 joint venture between BHP and Brazilian giant Vale. BHP shares were down 2.6%.
In the FTSE 250, Vectura Group was down 11%, the worst mid-cap performer. The respiratory pharmaceutical developer said its partner, Munidpharma, has informed the business that the phase III trial of Flutiform did not meet the primary endpoint of significantly reducing the annualised rates of moderate and severe chronic obstructive pulmonary disease (COPD) exacerbations when compared to mono-component LABA treatment alone. Vectura said it will not be allowed to make a regulatory filing for the product in Europe as intended.
In mainland Europe, the CAC 40 index in Paris was up 0.6% and the DAX 30 in Frankfurt was up 0.7%.
In Asia on Tuesday, the Japanese Nikkei 225 index closed down 0.1%. In China, the Shanghai Composite ended up 0.1%, while the Hang Seng index in Hong Kong continues up 0.8%.
Retail sales in Japan fell 0.2% on year in July, data from the Ministry of Internal Affairs and Communications showed. That beat forecasts for a decline of 0.9% following the upwardly revised 1.3% contraction in June, originally a 1.4% fall. On a monthly basis, retail sales jumped 1.4%, beating forecasts for 0.8% and up from 0.3% a month earlier.
Ahead in the economic calendar on Tuesday, eurozone consumer confidence data are at 1000 BST and Germany's consumer price index is at 1330 BST. Before that, UK mortgage approvals and consumer credit are at 0930 BST.
"The UK consumer seems to have shrugged off the news on the Brexit vote and, accordingly, we expect net consumer credit to remain in the range of the last six months, falling only slightly from GBP1.8 billion to GBP1.6 billion in July. Meanwhile, mortgage approvals should slip again from 64,800 to 61,100 in July," said Societe Generale analysts.
IG analysts said market participants also will focus on Tuesday on US consumer confidence data, due at 1500 BST, "as it seeks to follow up yesterday's broadly positive session for [US] stocks". On Monday, the Dow 30 index closed up 0.6%, the S&P 500 up 0.5% and the Nasdaq Composite up 0.3%.
However, IG said that "much like last week we start the week with half our focus on the end of the week, where Friday's US jobs report promises to provide a significant piece in the 2016 rate hike jigsaw."
By Daniel Ruiz; [email protected]
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