3rd Sep 2018 08:53
LONDON (Alliance News) - Stocks in London opened mixed on Monday, with the FTSE 100 higher amid weakness in the pound, ahead of the UK manufacturing PMI reading at 0930 BST. The FTSE 100 index was up 0.4%, or 26.84 points, at 7,459.26. The large cap index closed down 1.1% at 7,432.42 on Friday, its lowest level in four months. The mid-cap FTSE 250 index was down 0.1%, or 24.14 points, at 20,667.86. The AIM All-Share index was up 0.3%, or 3.01 points, at 1,107.16.The Cboe UK 100 was up 0.5% at 12,645.91, the Cboe UK 250 was down 0.1% at 18,755.53, and the Cboe UK Small Companies was up 0.1% at 12,281.95.On the London Stock Exchange, Melrose Industries was up 0.5% after Sky News reported late Friday that the turnaround specialist was talking to insurers, including Aviva and Scottish Widows, about the possibility of taking on the smaller of GKN's two retirement schemes.Sky News reported that discussions have been ongoing for several weeks with the insurers who specialise in pension risk transfer.Melrose is only interested in offloading the GBP500 million worth of liabilities if it can secure an "attractive price". The FTSE 100-listed company will still keep a hold of the larger of GKN's two pension schemes, which it has promised to inject up to GBP1.00 billion of cash into, the report added. At the other end of the large cap index, Imperial Brands was the worst blue chip performer, down 1.3% after RBC Capital downgraded the tobacco company to Underperform from Sector Perform. In addition, peer British American Tobacco was down 1.0% after RBC cut the Dunhill and Lucky Strike cigarette maker to Underperform from Sector Perform. Water comanies were lower following submission of their business plans for the period from 2020 to 2025 to UK water industry regulator Ofwat.United Utilities Group was down 1.1% after it said it intends to reduce its average customer bills in real terms over the period by 10.5% from GBP427 in 2019-20 to GBP382 in 2024-25.In addition, the utilities firm said it intends to reduce the total expenditure in its asset management period from GBP6.47 billion in the AMP5 programme to GBP5.4 million in United Utilities' plan submission for AMP7.Severn Trent was down 0.9% after it said it plans to reduce its real bill for Severn Trent Water customers by 5.0%, by using the company's commercial pipelines to produce 13% more efficiency in spending, with total expenses of GBP6.6 billion over the five-year period.Still to come in the economic events calendar on Monday is manufacturing PMI data from Italy, France, Germany, and eurozone at 0845 BST, 0850 BST, 0855 BST and 0900 BST, respectively.Sterling was marginally lower quoted at USD1.2915 early Monday, ahead of the UK manufacturing PMI reading at 0930 BST, against USD1.2970 at the London equities close on Friday.According to market expectations, the UK manufacturing PMI reading for August is expected to come in at 53.8, down slightly from 54.0 in July."For the August PMI report we predict a slight recovery to 54.5 from 54.0. Last week's Lloyds Business Barometer showed relative resilience in the manufacturing sector, compared with construction and services. But given manufacturing accounts for about 10% of the economy, more focus will be on Wednesday's services PMI survey," analysts at Lloyds said. In domestic political news, Boris Johnson launched a scathing attack on Theresa May's Brexit strategy, branding it a "fix" that can only lead to victory for the EU.In what is likely to be seen by many at Westminster as the beginning of a bid to try to oust the prime minister, the ex-foreign secretary insisted the UK is "lying flat on the canvas" in withdrawal talks.The UK has "gone into battle with the white flag fluttering over our leading tank" due to May's Chequers proposals to align UK standards on goods to the EU, Johnson said.Johnson accused "some members" of the government of deliberately using the Irish border situation to "stop a proper Brexit" and effectively keep Britain in the EU. He said that the real "scandal" was "not that we have failed, but that we have not even tried" on Brexit.Meanwhile, the EU's Chief Negotiator Michel Barnier said he is "strongly opposed" to the Chequers proposals because such "cherry-picking" would mean the end of the European project if enacted.In mainland Europe, the CAC 40 in Paris was down 0.1% while the DAX 30 in Frankfurt was down 0.1%.The euro was down against the dollar quoted at USD1.1596, from USD1.1605 at the European equities close Friday.Already out, Ireland's manufacturing activity expanded at the fastest pace in seven months in August, survey figures from IHS Markit showed.The Investec factory Purchasing Managers' Index rose to 57.5 in August from 56.3 in July. A score above 50 indicates expansion in the sector.Among components, both output and new orders grew at the quickest rate in this year so far. Consequently, firms raised their purchasing activity and staffing levels in August.In the US on Friday, Wall Street ended mixed, with the Dow Jones Industrial Average ending down 0.1%, the S&P 500 flat and Nasdaq Composite closing up 0.3%.US President Donald Trump took aim at Canada on Saturday, while threatening he could "terminate" the NAFTA free trade agreement with Mexico and the US's northern neighbour.He was tweeting a day after trade talks between the US and Canada broke down without result. The US and Mexico had reached a deal earlier in the week, putting pressure on Ottawa to keep the tripartite trading bloc alive."There is no political necessity to keep Canada in the new NAFTA deal. If we don't make a fair deal for the US after decades of abuse, Canada will be out. Congress should not interfere with these negotiations or I will simply terminate NAFTA entirely and we will be far better off," Trump tweeted.The talks are set to resume on Wednesday with the aim of eventually hammering out a trilateral deal.Markets in both the US and Canada will be closed on Monday for labour day holidays.In Asia, the Japanese Nikkei 225 index down closed down 0.6%. In China, the Shanghai Composite ended down 0.2%, while the Hang Seng index in Hong Kong is down 0.8%.China's manufacturing activity growth slowed in August on weaker new orders, survey data from IHS Markit showed.The Caixin Purchasing Managers' Index slipped to 50.6 in August from 50.8 in July. The score signalled the weakest improvement since June 2017.Production grew at the fastest pace since the start of the year. However, demand conditions softened, with total new business rising at the slowest pace for 15 months.Related Shares:
British American TobaccoSevern TrentUnited UtilitiesImperial Brands