30th Dec 2013 17:16
LONDON (Alliance News) - UK stocks closed mixed Monday, with small- and mid-caps outperforming their larger peers, as supermarket stocks weighed heavily on the UK's headline index. Trading volumes remained low following the Christmas break and ahead of the upcoming New Year's Day holiday, compounded by a thin economic and corporate calendar.
The FTSE 100 closed down 0.3% at 6,731.27, snapping a six-day winning streak, while the FTSE 250 closed up 0.1% at 15,900.74, and the AIM All-Share index closed up 0.8% at 848.07.
The blue-chip index's decline can be attributed to a softening in the share price of UK food retailers, "as fears grow that German competitors, such as Aldi and Lidl, and their discount prices, are cutting into the main UK supermarkets' market share," said Alex Conroy, financial sales trader at Spreadex.
Sainsbury, closing down 1.9%, Morrison, down 1.5%, and Tesco, off 1.1%, were all amongst the biggest blue-chip fallers Monday.
Despite Monday's retracement, London's bellwether index remains well-placed to close the month of December higher than it started it for the eleventh consecutive year. Currently, the FTSE 100 is 80.7 points higher than it was at the start of the month.
On the economic front, data releases were few and far between Monday.
UK housing data revealed that the average asking price for a house in the UK was up 0.5% in December compared to the previous month, property tracking website Hometrack said, having gained 0.5% in November. The website said that house prices climbed 4.4% on a yearly basis.
In the eurozone, Italian business confidence improved in December, statistical office Istat said. The confidence indicator for the manufacturing sector increased to 98.2 in December, from 98 in November and 97.3 in October. Economists had forecast the index to rise to 99 in December.
Meanwhile, Italian producer prices declined for the ninth successive month in November. The industrial producer price index decreased 1.8% annually in November, after falling 2% in October.
In the US, pending home sales showed a slight increase in the month of November, according to a report released by the National Association of Realtors. The pending home sales index inched up 0.2% to 101.7 in November from a downwardly revised 101.5 in October, falling short of economists estimations. The index had been expected to jump about 1.0%.
The dollar fell against its major counterparts in the aftermath of the weaker-than-expected report. At the close of the UK equity markets, the pound trades at USD1.6522, the euro at USD1.3811, and the Swiss franc at USD1.1275.
The Dallas Federal Reserve's manufacturing business index for December came in at 3.1, up from 1.9 in November.
Back in the UK, the government could complete the privatisation of Lloyds Banking Group in 2014 with the sale of its remaining 33% holding, The Telegraph newspaper reported Monday. The government could sell its stake, currently valued at GBP18.4 billion, through a combination of institutional sales and a retail offering to the public, the paper said. Lloyds shares closed down 0.5%.
International Personal Finance, closing up 10%, was the biggest winner in the FTSE 250.
The company has seen its share price rebound after falling 16% on Friday. The group revealed early last week that it had been fined GBP2.4 million by the Polish Office of Consumer Protection and Competition after it failed to correctly calculate the annual percentage rate on its products. However, following the dramatic share price decline, Numis Monday confirmed the company at Buy. The investment bank believes that the risk associated with the fine is "more than reflected in the share price."
Also in the FTSE 250, Vedanta Resources was a big gainer. The mining company closed 4% higher after its subsidiary, Sesa Sterlite Ltd, said it had resumed mining activities at its Karnataka mine, after receiving permission from the Indian Supreme Court.
AIM All-Share-constituent LED International Holdings, closing up 86%, was another big winner. The energy-efficiency technology company said its pretax loss narrowed to HKD19.2 million for the year ended June 30, compared from HKD39.5 million the previous year.
LED International also said it had completed a conditional placing of shares raising roughly GBP3.1 million. The placing is conditional on a proposed 1-for-100 share consolidation.
At the other end of the spectrum, Max Petroleum was amongst the biggest AIM-fallers, despite recording successful drilling results of an appraisal well in the Sagiz West Field. The group reported lower revenue and production levels and wider losses in the first-half of the year from a year before. Its loss for the six months to September 30 widened to USD5.0 million, compared with USD3.6 million a year earlier. Max Petroleum closed 12% lower.
In the data calendar Tuesday, the US Redbook index is released at 1355 GMT, ahead of the S&P/Case-Shiller home price indices at 1400 GMT. The Chicago purchasing managers' index for December is scheduled at 1445 GMT, with US consumer confidence information expected at 1500 GMT.
However, with the London Stock Exchange closing at 1230 GMT for New Year's Eve, these will not affect UK equities.
By James Kemp; [email protected]; @jamespkemp
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