18th Nov 2013 10:52
LONDON (Alliance News) - UK stocks trade mixed Monday, with large-caps outperforming their smaller peers, as investors express caution ahead of a week of much-anticipated data releases.
"A strong session in China and Hong Kong has again failed to filter through to the European open," says Toby Morris, senior sales trader at CMC Markets.
Asian stocks posted strong gains Monday after Federal Reserve Chairman nominee Janet Yellen backed a continuation of the Fed's USD85 billion monthly asset purchase program and China pledged to undertake sweeping economic and social reforms over the next decade. The Hang Seng index has closed up 2.7% at 23,660.06, having reached a nine month high of 23,706.68, earlier in trading.
However, in the UK and Europe, "given the recent reliance on Fed commentary and a void of economic numbers today, bulls seem to have decided to sit on the fence ahead of Wednesday's Federal Open Market Committee minutes release," says CMC's Morris.
Alongside this, following disappointing third quarter GDP numbers from France, Italy and Germany last Thursday, preliminary PMI numbers for France and Germany later in the week also are in focus.
By mid-morning, the FTSE 100 is up 0.2% at 6,706.77, the FTSE 250 is marginally lower at 15,243.05, while the AIM All-Share index is down 0.1% at 807.76.
European stock indices, climbed higher Monday following the release of trade surplus figures from the eurozone, having opened close to flat.
Foreign trade surplus in the eurozone increased markedly in September, according to the latest data from the statistical office Eurostat. The region's trade in goods with the rest of the world resulted in a surplus of EUR13.1 billion in September, up from EUR6.9 billion surplus in August. The trade balance was expected to reach EUR10.0 billion.
The French CAC trades up 0.4%, while the German DAX is up 0.5%.
Within the FTSE 350 sector indices, general financial, up 1.7%, is currently the biggest gaining sector, boosted by Aberdeen Asset Management, up 13%. Aberdeen is set to become the world's largest listed fund manager after it said it has agreed a deal to buy Scottish Widows Investment Partnership Group Ltd. from Lloyds Banking Group for up to GBP660 million. Aberdeen, which had GBP200.4 billion in assets under management at the end of September, will add about GBP136 billion more by buying the business, with annual revenues of about GBP234 million.
At the other end of the spectrum, oil equipment, services and distribution, down 4.6%, is the biggest falling index, dragged lower by Petrofac. Petrofac, down 15%, is the biggest blue-chip faller on the back of a disappointing interim management statement. "Project slippages have reduced 2014 expectations and increased the risk that the 2015 earnings target will be missed," Liberum Capital says.
FTSE 250-listed Aveva Group, down 10%, is another big loser. Despite reporting that pretax profit increased 5.8% in its first half, the software company said its operating expenses increased 12% to GBP73.0 million from GBP65.0 million and that there was slower-than-expected growth in its enterprise solutions division, which will lead to lower-than-expected revenue for that division for the full financial year.
Still to come in the data calendar Monday, the US National Association of Home Builders housing market index is scheduled for 1500 GMT.
By James Kemp; [email protected]; @jamespkemp
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