4th Jul 2016 07:34
LONDON (Alliance News) - Stocks in London were mixed Monday morning, with miners benefiting from the appetite for risk from investors but International Consolidates Airlines Group was missing out the gains after an investigation was launched in Spain into IAG's low-cost airline Vueling following chaos at Barcelona airport over the weekend.
The FTSE 100 was up 0.1%, or 6.85 points, at 6,584.68. The FTSE 250 was down 0.6% at 16,370.10 and the AIM All-Share was up 0.3% at 715.53.
Accendo Markets analyst Michael van Dulken said the positive open for the FTSE 100 extends the post-Brexit rebound recovery "on hopes that central banks will keep the monetary policy punch bowl topped up to offset economic uncertainty unleashed" by the vote.
European stocks were higher, with the CAC 40 in Paris and the DAX 30 in Frankfurt both adding 0.1%.
In Japan, the Nikkei 225 index in Tokyo added 0.6%, while in China, the Shanghai Composite rose 1.9%. The Hang Seng index in Hong Kong continues up 1.6%.
Bank of England Governor Mark Carney said late Thursday the EU referendum outcome had created uncertainty and deteriorated the economic outlook for the UK, which may require "some monetary policy easing" over the summer. The bank's rate-setting monetary policy committee will make an initial assessment for its next policy decision on July 14 and will complete a full assessment with new forecasts in the August Inflation Report, due on August 4.
UK Chancellor of the Exchequer George Osborne is planning to cut corporation tax to less than 15% as part of a plan to give Britain a post-Brexit-vote economic boost. The Chancellor said the UK must show it was "still open for business" following the decision to leave the European Union as he set out plans to create a "super competitive economy".
Slicing more than five percentage points off the current corporate tax rate of 20% would see Britain close in on Ireland's 12.5% levy and make the UK one of the most competitive global economies for corporate taxation.
In a thin economic calendar Monday, the highlight for London will be the UK construction Purchasing Manager's Index at 0930 BST. Expectations for the June reading are for a decline to 50.5 from 51.2 in May, according to FXStreet.com. A figure greater than 50 still represents growth.
Meanwhile, Sentix investor confidence survey for the eurozone is due at 0930 BST, while the eurozone producer price index is later at 1000 BST.
The US stock market will be closed Monday for the US Independence Day holiday.
On the London Stock Exchange, miners were benefiting the most from the risk-on mood among investors, with Anglo American up 3.1%, BHP Billiton up 2.7% and Antofagasta up 2.6%.
However, gold miners were leading the gainers in the FTSE 100, tracking the the precious metal's price, with Fresnillo and Randgold Resources up 7.5% and 3.6%, respectively.
Gold was quoted at USD1,349.48 an ounce, higher than the USD1,337.16 at the London equities close Friday. Meanwhile, oil was also higher, with Brent crude above the USD50 line. The North Sea benchmark was at USD50.59 a barrel shortly after the open, compared to USD49.74 late Friday.
Shares in oil producers were also higher, with Royal Dutch Shell 'A' shares up 0.9% and BP up 1.0%.
At the other end of the blue-chip index, International Consolidated Airline Group was down 2.6%, after an investigation was launched in Spain into the British Airways-owner's low-cost airline Vueling, following chaos caused by the company at Barcelona airport at the weekend, the Spanish Transport Ministry said Sunday.
The management of the airline has been summoned to an emergency meeting in Madrid on Monday where they would be expected to deliver "explanations and immediate corrective measures," the statement said.
After days of "operational problems," a further 13 flights were cancelled by the Catalan airline by midday Sunday without any reason being given, La Vanguardia newspaper reported online.
In the FTSE 250, shipping services firm Clarkson was down 23% after it warned profit in 2016 will be "materially lower" year-on-year as it continues to face challenges in its key markets.
Clarkson said the recent recovery in the oil price has driven the return of some activity in the company's offshore broking division, but it will take some time before a meaningful recovery is seen in the oil and gas industry.
Clarkson said overall transactions in its broking arm have increased, but the fall seen in freight rates and asset values has hit its revenue. This, combined with quiet capital markets and weak investor confidence, has reduced activity in its financial division.
By Daniel Ruiz; [email protected]
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International AirlinesAnglo AmericanRDSA.LRDSB.LBPBHP Billiton PLCRandgold ResourcesFresnilloClarkson