3rd Dec 2015 08:36
LONDON (Alliance News) - UK equities have opened largely flat Thursday, with broker rating changes driving early stock movements ahead of the European Central Bank's monetary policy decision later in the day.
Fashion retailer Next was one of the best performers in the FTSE 100, up 1.6% at 8,140.00 pence after Goldman Sachs raised it to Buy from Neutral and lifted its price target to 8,700.00p from 7,400.00p.
At the other end of the blue-chip index, Ashtead Group was down 2.4% after Exane BNP cut the industrial equipment rental company to Neutral from Outperform. Primark owner Associated British Foods was down 1.4% after Goldman Sachs cut it to Sell from Buy, and department store operator Debenhams was down 4.2% after Goldman cut the stock to Sell from Neutral.
The FTSE 100 index traded flat at 6,421.92, the FTSE 250 was also flat at 17,547.87 and the AIM All-Share was up 0.1% at 742.76.
European stocks were posting modest gains. The CAC 40 in Paris was up 0.2% and the DAX 30 in Frankfurt was up 0.1%.
In Asia, the Nikkei 225 index in Tokyo closed flat, the Hang Seng in Hong Kong ended down 0.3% and the Shanghai Composite closed up 1.4%.
In the FTSE 250, oil services company John Wood Group traded up 1.7% after it struck a deal to acquire a family-owned contractor in Texas for up to USD192.0 million.
The Infinity Group is an industrial construction and maintenance contractor serving the petrochemical, refining and gas processing sectors and has seven locations along the Texas Gulf coast. John Wood Group paid an initial USD150.0 million, with further payments possible in the future.
Polymetal International was up 1.2% after it said it will pay a special dividend for the 2015 financial year and has decided to proceed with the construction and development of the Kyzyl gold project in Kazakhstan.
The FTSE 250-listed precious metal miner will pay a special dividend of 30.0 cents for the year to end December 31, pushing the total dividend for the year to 38.0 cents per share. Currently, the total 38.0 cent dividend for 2015 is still down from the 41.0 cents paid in 2014, but the final dividend for the current year could still rise.
The special dividend was helping Polymetal post gains despite the weakness in precious metal prices on Thursday. At the open, gold traded at USD1,052.48 an ounce having dropped to a low of USD1,046.00 an ounce before the London open, its lowest price in just over six years. Silver hit a low of USD13.81 an ounce, its lowest price in over six years.
Starcom was by far the best performer in the AIM All-Share index, up 77%. The wireless monitoring products company said it has signed a supply and support deal with Pinnacle Systems Ltd for its Helios fleet tracking units.
Pinnacle, a Nairobi, Kenya-based road safety, fleet management and vehicle security systems company, will buy thousands of Helios units over a three-year period in a deal valued at around USD5.5 million for Starcom.
"This is our largest contract to date and we are delighted to be working with Pinnacle Systems on this major supply and support agreement. We are working hard to win and fulfil similar large high value contracts currently under discussion," said Avi Hartmann, Starcom's chief executive.
The ECB will be taking centre stage later in the day, when it announces its interest rate decision at 1245 GMT, followed by a press conference in Frankfurt at 1330 GMT. Analysts are largely expecting President Mario Draghi to announce a 10 basis point cut to its deposit rate which is currently at -0.20%, as well as an extension to the bank's asset purchase programme beyond the previously indicated September 2016.
Elsewhere in the economic calendar, there are a series or services PMI readings. Markit services and composite purchasing managers' index readings for France are at 0850 GMT, Germany at 0855 GMT, the eurozone at 0900 GMT and the US at 1445 GMT. UK services PMI is at 0930 GMT.
Following this are eurozone retail sales at 1000 GMT, continuing and initial jobless claims in the US at 1330 GMT, ISM non-manufacturing PMI at 1500 GMT, alongside US factory orders.
Focus will also be on Federal Reserve Chair Janet Yellen, who will testify before the Joint Economic Committee in Senate at 1500 GMT.
On Wednesday, Yellen signalled the Fed is on track to raise interest rates at its December 15-16 meeting. Yellen stopped short of explicitly saying the Fed will hike rates this month, but acknowledged that conditions for tightening are on the verge of being met.
By Neil Thakrar; [email protected]; @NeilThakrar1
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