11th Jan 2016 08:41
LONDON (Alliance News) - Stock prices have opened lower in London Monday as declines in the Chinese stock market and a wild swings in the South African rand unsettled investors.
In the Asian trading session, the South African rand fell to a new record low against the dollar before rebounding slightly. The rand hit a low of USD0.0558 but traded at USD0.0602 just after the London open.
The decline in the currency hit the shares of South African-focused companies. Anglo American, which has a large proportion of its mining operations in South Africa, traded down 1.6%. Financial services groups Old Mutual and Investec were down 1.0% and 4.3%, respectively, while paper and packaging company Mondi was down 1.1%.
The FTSE 100 index was off 0.3% at 5,895.32 points early Monday. The FTSE 250 was down 0.5% at 16,653.73, and the AIM All-Share index traded flat at 725.25.
In Europe, the French CAC 40 index was up 0.3% and the German DAX 30 was flat.
Asian stocks ended lower, with the Shanghai Composite sliding 5.3%, starting another week with heavy losses. The Hang Seng in Hong Kong ended down 2.8%. The Tokyo market was closed for the Coming of Age holiday.
Broker upgrades were driving many of the gainers in the FTSE 100. Whitbread, owner of Premier Inn and Costa Coffee, traded up 1.6% after it was initiated at Buy by Bank of American Merrill Lynch. Investment and savings company Standard Life was up 1.2% after it was upgraded to Buy from Hold by both Deutsche Bank and Jefferies, after HSBC had done the same on Friday. Defence contractor BAE Systems traded up 1.7% after JP Morgan lifted it to Overweight from Neutral.
Home Retail Group was one of the best performers in the FTSE 250, up 1.5%. Several shareholders in the parent of Argos and Homebase, have demanded more than GBP1.6 billion for the business from J Sainsbury, the Sunday Times reported.
According to the newspaper, the supermarket now faces an uphill struggle to acquire Home Retail Group, following news last week that it had made an offer for the company in November.
Sainsbury's traded down 0.7%.
Three London-listed companies working together offshore the Falkland Islands said they have made a new oil discovery whilst confirming a previous discovery after re-drilling one of their wells.
Premier Oil, Rockhopper Exploration and Falkland Oil and Gas all confirmed the discoveries from the Isobel deep well located on licence PL004A.
Premier Oil is the operator of the licence and re-drilled the Isobel deep well offshore the Islands to a total depth of 3,014 metres, confirming a previously made oil discovery and making a new oil discovery in additional sandstones.
Falkland Oil & Gas traded up 17%, Rockhopper was up 14% and Premier Oil traded down 0.7%.
In the economic calendar for Monday the Sentix Investor Confidence for the eurozone is at 0930 GMT and the US labor market conditions index is at 1500 GMT. Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, will be making a speech at 1740 GMT.
By Neil Thakrar; [email protected]; @NeilThakrar1
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