29th Sep 2014 09:39
LONDON (Alliance News) - The main UK indices trade lower Monday, as investor concerns about the pro-democracy protest in Hong Kong weigh on stocks.
At mid-morning, the FTSE 100 is down 0.4% at 6,622.95 and the FTSE 250 down 0.2% at 15,355.13. The AIM All-Share index is outperforming, up 0.3% at 751.73.
European equity markets are also trading lower, with the CAC 40 in Paris down 0.4% and the DAX in Frankfurt down 0.3%. In Hong Kong, the Hang Seng index closed down 1.9%.
The student-led protests in Hong Kong over the weekend and on Monday are weighing on investor sentiment as they raise concerns about instability in China. The protests are against China's decision to restrict open elections in the territory. Police have resorted to tear gas, pepper spray and baton charges in attempts to disperse protesters.
"The increased volatility that markets enjoyed last week looks set to continue, as European traders settle in with news of mass protests in Hong Kong destabilising Asian confidence and knocking stocks. The ensuing chaos has seen Standard Chartered drop by 2.0% following the closure of its operations in the previous British colony," says IG market analyst Alastair McCaig.
Standard Chartered said Sunday that it has temporarily suspended banking services at some of its branches in Hong Kong until further notice. The UK-based lender said that from Monday onwards, until further notice, it will temporarily suspend banking operations at five of its branches in Hong Kong. HSBC, which also has operations in Hong Kong, has fallen 1.8%.
In other stock news, Compass Group is one of the leading gainers in the FTSE 100, with its shares up 1.6%. The food and support-services company said strong growth in its fourth quarter was again driven by North America and its emerging and fast growing markets, but said that while its full-year expectations remains "positive and unchanged", it has suffered a big hit from sterling strength.
Compass said that for the full financial year ending September 30, it expects its North America and Fast Growing & Emerging regions to deliver "healthy levels" of organic growth, while it said it also has seen improvements through the year in Europe and Japan.
Another gainer in the blue-chip index is Aberdeen Asset management which reported a 2.7% increase in assets under management over July and August, as positive market movements and performance more than offset GBP1.7 billion of net outflows. In the three months to the end of June, Aberdeen recorded GBP8.8 billion of net outflows, prompting the asset manager to say that net outflows have "moderated" in the two months since. Aberdeen said inflows were won into higher margin products, while outflows were more weighted towards lower-margin capabilities. The company's shares have risen by 1.5%.
Meanwhile, Balfour Beatty's share value has been slammed after it said it expects its Construction Services UK division to take another GBP75 million hit to its profit this year and said it has appointed auditors KPMG to undertake a detailed independent review of the contract portfolio within the business.
Balfour said trading across the rest of the company remains in broadly line with expectations. The company said it is now at an advanced stage in the process of appointing a new chief executive. Balfour also said it intends to update on the sale of its Parsons Brinckerhoff business in October and said it anticipates GBP200 million will be returned to shareholders via a share buyback programme following completion of the divestment. Balfour said its final dividend for the year would be assessed in light of the sale of the Parsons Brinckerhoff business.
The company's shares are comfortably the biggest faller in the FTSE 250 index, falling 21%.
UK mortgage approvals for August declined more than expected to a three-month low at 64,212 from 66,100 in July. The reading also missed the consensus figure of 65,000. However, consumer credit for August beat forecasts, growing by GBP0.898 billion, ahead of the GBP0.85 billion expectation, but below the previous month's print of GBP1.1 billion growth.
Still ahead on Monday is German consumer price index and harmonised index of consumer prices for September at 1300 BST. Afterward is US personal income and personal spending for August at 1330 BST before and US pending home sales for August at 1400 BST.
Futures indicate a lower opening for Wall Street, with the three main indices shown down 0.4%.
By Neil Thakrar; [email protected]
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Balfour BeattyHSBC HoldingsStandard CharteredCompass GroupADN.L