28th Sep 2015 07:40
LONDON (Alliance News) - UK stocks opened lower Monday, with Glencore and Vodafone leading the decliners in the FTSE 100.
The FTSE 100 index was down 0.7% at 6,065.12 points, the FTSE 250 was off 0.4% 16,741.09, and the AIM All-Share was 0.2% lower at 731.35. In Europe, the CAC 40 in Paris was down 0.4% and the DAX 30 in Frankfurt was down 0.3%.
Vodafone Group said its talks with US cable company Liberty Global PLC have terminated. The mobile phone company, down 3.5%, had confirmed talks with Liberty Global in early June over a potential exchange of some assets between the two.
Glencore was down 5.7%, setting another new record low. AIM-listed Horizonte Minerals said it has struck a deal to acquire the FTSE 100-listed miner's Araguaia nickel project in Brazil to enlarge its existing nearby project.
Buying Glencore's Araguaia project will enlarge Araguaia's own nickel project in Brazil to create "one of the largest saprolite nickel projects in the world," said Horizonte. Horizonte will pay USD2.0 million once the deal is completed, which will be satisfied through the issuance of 2.0 million shares, and the total acquisition cost is USD8.0 million.
Meanwhile, drinks company SABMiller was the best performer in the blue-chip index, up 3.6% at 3,724.50 pence. Belgian brewer Anheuser-Busch InBev could bid GBP70 billion for SABMiller this week, the Sunday Times reported. Societe Generale upgraded the stock to Buy from Hold, lifting its price target to 4,300p from 3,500p.
Wm Morrison Supermarkets was also in the green, up 1.0%, after being upgraded by Bernstein to Market-Perform from Underperform.
In the FTSE 250, Home Retail Group was up 1.1% after Cantor Fitzgerald upgraded the owner of catalogue retailer Argos and DIY and garden centre company Homebase to Buy from Hold.
In China on Monday, the Shanghai Composite ended down 0.3%, while Hong Kong was closed as the Chinese Mid-Autumn Festival celebration was celebrated on Sunday. Meanwhile, the Japanese Nikkei 225 ended down 1.3%
Japan's Leading Economic Index declined slightly less than estimated in July, final data from the Cabinet Office showed Monday. The leading index dropped to a four-month low of 105.0 in July from 106.7 in June. The initial estimate for July was 104.9. It signals the trend in future economic activity.
China's industrial profits declined in August as product prices continued to decrease, the National Bureau of Statistics reported Monday. Industrial profits fell 8.8% in August from a year ago, following a 2.9% drop in July. Falling product prices, as well as lower return on investment, weighed on industrial profits.
During January to August, industrial profits decreased 1.9% from the corresponding period of last year. Profits of coal mining plunged 64.9% from last year and oil and gas extraction industry profits decreased sharply by 67.3%. The decline in automotive industry came in at 4.5%.
"Concerns about the Chinese economy and speculation over when the US Federal Reserve will begin to raise interest rates are likely to continue to be the dominant issues for markets," says Lloyds Bank. "The key Chinese data will come later in the week but today will see both US data and some Fed speakers that could impact on interest rate expectations."
On Thursday, there are the Caixin manufacturing and services Purchasing Manager's Index readings from China.
Wall Street ended mixed on Friday. The Dow 30 index closed up 0.7%, the S&P 500 ended down 0.1% and the Nasdaq Composite down 1.0%.
In a US-heavy economic calendar on Monday, there are US personal income, consumption and expenditure data at 1330 BST, pending home sales at 1500 BST and the Dallas Fed manufacturing business index at 1530 BST.
There also are speeches by Federal Reserve Bank of Chicago President Charles Evans at 1830 BST and Federal Reserve Bank of San Francisco President John Williams at 2200 BST.
"Last week?s US second-quarter gross domestic product revision was positively received by investors with personal consumption driving most of the upward revision," says CMC Markets chief market analyst Michael Hewson.
On Friday, updated US government data showed that the economy expanded at a revised rate of 3.9% in the second quarter. This was up from the 3.7% growth estimate reported last month. The second quarter saw a strong rebound from the first three months of the year, when the economy shrank by 0.2%. Growth was fuelled by higher consumer spending and increased business investment.
"Today?s personal income and spending numbers for August will give a more up-to-date look at the US consumer and their willingness to spend. Despite the strength of the Q2 GDP numbers consumer spending has been one of the US economy?s weaker points and is expected to show a rise of 0.3%, with personal income set to show a similar rise," Hewson adds.
By Daniel Ruiz; [email protected]
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