23rd Mar 2015 17:07
LONDON (Alliance News) - UK stocks fluctuated between gains and losses Monday on a light day of economic data, but the FTSE 100 and FTSE 250 indices both managed to achieve new records.
The blue-chip FTSE 100 closed up 0.2% at 7,037.67, and the mid-cap FTSE 250 ended up 0.1% at 17,551.23. Both were record high closes and intraday records as well.
The AIM All-Share closed slightly higher at 716.17. The alternative market index is well below its own record high of 2,924.90 points from March 2000.
Tom Elliot, international investment strategist at deVere Group is cautious about buying into the stock market rally.
"We must remember that underlying the six-year rally in risk assets, which began in March 2009, is massive central bank intervention in the form of ultra-low global interest rates and quantitative easing. This has disabled the financial markets' ability to signal changes in the real economy, leading us to be very cautious over buying into any rally," Elliot said.
European stocks underperformed London as the euro made up some ground against other major currencies. At the close of European equity markets, the euro traded at USD1.0935, and the pound was quoted at EUR1.3665. The CAC 40 in Paris closed down 0.7%, and the DAX 30 in Frankfurt ended down 1.2%.
European stock investors were focused on the meeting between Greek and German leaders to discuss Greece's debt crisis. Greek Prime Minister Alexis Tsipras will present German Chancellor Angela Merkel with a list of reforms, hoping to unlock bailout out funds to prevent Greece from running out of cash next month, Greek government sources said.
In addition, European Central Bank President Mario Draghi said Greece must settle all its international debts. "The government of Greece should commit to fully honour its debt obligations to all its creditors and to premise all future policies on this commitment," Draghi said at a quarterly hearing before the Committee on Economic and Monetary Affairs of the European Parliament in Brussels.
Draghi expressed optimism though that discussions between Greece and its creditors will bring the country's bailout process back on track, paving the way for a decision on whether to grant Athens new funds from its rescue package.
At the end of London equity trade, Wall Street was mainly higher, with the DJIA up 0.4% and the S&P 500 up 0.2%, but the Nasdaq Composite trading flat.
On the London Stock Exchange, oil and mining stocks were again amongst the best performers in the FTSE 100, benefiting from rising commodities prices. Brent oil rose to a high of USD56.17 a barrel, coming off a low of USD54.09, while gold hit USD1,189.33 an ounce.
"Copper prices exploded again, re-taking USD2.80 per pound for the first time since the start of the year. The move higher appears largely dollar-related and will be exposed by Chinese PMI data released tomorrow," added Jasper Lawler, market analyst at CMC Markets.
BHP Billiton, up 3.2%, Royal Dutch Shell 'B', up 2.0%, and Antofagasta, up 1.8%, were amongst the best performers in the blue-chip index.
Standard Chartered closed as the top gainer in the FTSE 100, up 6.9%. The emerging markets bank was upgraded to Overweight from Neutral by JP Morgan, which said the company could benefit by taking a decision to re-domicile away from the UK to avoid an increased banking levy.
Meggitt, down 1.7% was amongst the worst blue-chip performers after Bernstein downgraded the engineer of components for the aerospace, defence and energy markets to Market-Perform from Outperform, according to traders.
Carnival, down 1.6%, also was one of biggest fallers after Deutsche Bank downgraded the cruise operator to Hold from Buy, saying the recent moves in the euro and in the pound could harm to the cruise operator's results.
Centamin, up 16%, was the best performer in the FTSE 250. The Egypt-focused gold miner reported a sharp drop in pretax profit for 2014 as the falling gold price offset a rise in production, but the company still declared a dividend for the year at a level that pleased analysts.
Centamin said its pretax profit for the year was USD81.6 million, less than half the USD184 million it posted a year earlier. Revenue dropped to USD472.6 million from USD503.8 million. However, the company proposed a final dividend of 1.99 US cents per share, giving it a total payout of 2.86 cents per share for the year. Centamin paid no dividend in 2013.
FirstGroup, up 3.9%, was also another big gainer in the midcap index. The transport operator said it had retained the First Great Western rail franchise in the UK until at least April 2019, and pledged to add new and updated trains, faster services, more direct trains to Devon and Cornwall, and improvements to infrastructure. The company said it will continue the franchise until April 1, 2019, and the deal could be extended for a further year at the UK government's discretion. It has already been running the franchise since 2006.
In the economic calendar Tuesday, there is the HSBC manufacturing purchasing managers' index for China at 0145 GMT. The Markit manufacturing, composite and services PMI for France is at 0800 GMT, for Germany at 0830 GMT and for the eurozone at 0900 GMT. US Markit manufacturing PMI is at 1345 GMT. At 0930 GMT there is UK consumer, retail and producer prices, while US CPI is at 1230 GMT.
In the UK corporate calendar, FTSE 100 building products supplier Wolseley reports half-year results. Soft drinks maker AG Barr, independent hospital group Spire Healthcare Group, and John Laing Infrastructure Fund all provide full-year results.
By Neil Thakrar; [email protected]; @NeilThakrar1
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