9th Sep 2015 07:36
LONDON (Alliance News) - UK stocks opened in the green Wednesday, with miners pushing higher, as Chinese stocks rallied on expectations of further stimulus measures by the country's authorities.
The FTSE 100 index was up 1.9% at 6,261.91, the FTSE 250 up 1.3% at 17m218.87 and the AIM All Share up 0.3% at 736.99. In Europe, the CAC 40 index in Paris was up 2.1% and the DAX 30 in Frankfurt was up 2.0%.
Glencore, up 5.6%, was the best blue-chip performer followed by Anglo American, up 3.7%. BHP Billiton was up 2.4% and Rio Tinto up 2.4%. The FTSE 350 Mining Sector Index was the best performing sector index, up 2.8%.
Anglo American said its Rustenberg Platinum Mines arm has entered into a deal to sell the Rustenberg mine and concentrating operations in South Africa to Sibanye Gold. The Anglo-South African miner said it has sold the stake for at least ZAR4.5 billion, or about GBP215.6 million at current exchange rates.
The payment for the mine will be split between an upfront payment of cash or Sibanye shares totalling ZAR1.5 billion in value, plus a deferred consideration calculated as being equal to 35% of the distributable cash flow from the Rustenberg mine over a defined period, with the minimum amount payable set at ZAR3.0 billion.
Outside miners, Hargreaves Lansdown was up 4.8%. It reported a 6% drop in pretax profit as margins came under pressure, with the fall attributed to the fund supermarket's move to cut charges for clients, lower interest margins on client cash and lacklustre stock markets. The fund supermarket, which sells financial products to retail clients, said it made a GBP199.0 million pretax profit in the year ended June 30, compared with GBP209.8 million in the prior year.
However, the company raised its dividend for the year to 33 pence per share from 32.0p.
Barratt Developments also was up 2.5% after it said its pretax profit, revenue and house sales were all higher in the year to the end of June, prompting the company to return substantially more money to shareholders, including a special dividend.
The company said it will pay a 10.0 pence per share special dividend. In addition to a total ordinary dividend payout of 15.1p, up from 10.3p a year earlier, the total payout to shareholders will be 25.1 pence per share, more than double the 10.3 pence it paid the year before and meaning its total capital return for the year is GBP250.0 million, up from GBP102.0 million.
In addition to the strong results, Barratt said trading in its current financial year has continued the positive momentum, with net private reservations per week up 15% year-on-year, and the group's forward sales book at September 6 was 32% higher than a year before.
Fellow Crest Nicholson Holdings was up 3.4% in the FTSE 250 after Goldman Sachs added the homebuilder to its "Conviction Buy List" from Neutral, while Redrow was down 0.4% after being downgraded by Goldman to Neutral from Buy.
Meanwhile, Foxtons Group also was higher after Goldman Sachs upgraded the company to Neutral from Sell. Foxton shares were up 3.8%.
In AIM, Monitise was down 23% after Elizabeth Buse resigned just months after she was named its sole chief executive, as the mobile banking and payments company also reported a significantly larger loss in its recently completed financial year.
Citing personal reasons, Buse said she is stepping down so that she can return to the US. The former Visa Inc executive became sole chief executive of Monitise in March when former co-CEO Alastair Lukies left the company he founded. Lee Cameron, the company's deputy CEO and chief commercial officer, has been named as the successor to Buse.
The Chinese stocks rally was benefiting London-listed Fidelity China Special Situations, which led the mid-cap gainers, up 4.6%. In Hong Kong, the Hang Seng index was up 3.6%, while the Shanghai Composite finished up 2.3%.
"Yesterday?s rebound has continued in Asia this morning with strong gains there as investors speculate that Chinese authorities will continue to ramp up their recent stimulus measures with further action in the coming days," said CMC Markets Chief market analyst Michael Hewson.
"According to a [China's] Ministry of Finance statement late Tuesday investment in major construction projects will be brought forward with the help of private financing. Some income tax changes to dividends were also announced to encourage long term investment in Chinese shares," Hewson said.
The economic forum known as the Summer Davos kicked off Wednesday in the northeast Chinese city of Dalian. Over 1,700 business leaders, political figures and entrepreneurs from 90 countries gathered to discuss new growth strategies at the World Economic Forum's Annual Meeting of the New Champions. Co-hosted by China and running from September 9 to 11, the event comes amid mounting fears of a sharp downturn in the world's second-largest economy.
Meanwhile, in Japan, the Nikkei 225 closed up 7.7%, wiping out the losses seen on Tuesday.
Japan's consumer confidence improved by more than expected in August after falling in the previous month, survey data from the Cabinet Office showed Wednesday. The consumer confidence index rose by 1.4 points to 41.7 in August from 40.3 in July. Economists had expected the index to increase slightly to 40.5.
In the UK, ahead of Thursday?s Bank of England Monetary Policy Committee announcement and the publication of the last meeting's minutes, Lloyds Bank said it looks for a relatively soft report for official July UK manufacturing and industrial production data, due at 0930 BST.
"After the 0.2% month-on-month rise in manufacturing output in June, we expect renewed sluggishness in July, reflecting in part sterling?s strength in recent months, and have pencilled in a flat outturn," said Lloyds. "Month-on-month growth for overall industrial production in July could be slightly negative, weighed down also by weak oil and gas output."
The bank also said that these forecasts suggest that the BoE's monetary policy will remain firmly on hold for now.
Wall Street ended higher Tuesday, re-opening after a holiday on Monday, with the DJIA up 2.4%, the S&P 500 up 2.5% and the Nasdaq Composite up 2.7%.
The focus in the US will be in the release of the JOLTS job openings data, expected at 1500 BST, as market participants search for clues as to whether the US Federal Reserve will raise US interest rates this month or later this year. Before that, the Redbook index is due at 1355 BST.
By Daniel Ruiz; [email protected]
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Related Shares:
Fidelity China Special Situations PLCAnglo AmericanMonitiseCrest NicholsonRio TintoBHP Billiton PLCHargreaves LansdownBarratt DevelopmentsFoxtonsRDW.LGlencore