AGK.L Share News (AGK)

LONDON (Alliance News) - The FTSE 100 couldn't avoid losses Monday despite a strong performance from its heavyweight mining sector in a light day of economic data, as investors in New York get ready for aluminium company Alcoa to kick off the US earnings season.

The blue-chip index ended down 0.1%, or 4.29 points, at 6,200.12.

"Interestingly, today has seen both risk assets (crude oil and stocks) and traditionally safe haven assets (gold and Japanese yen) outperform, with the US dollar in particular suffering heavily on the day. This mixed bag highlights the lack of a single running theme which has been highlighted by the lack of direction across many markets in recent weeks," said IG analyst Joshua Mahony.

Though the FTSE 100 spent most of the day flat, a strong performance from miners couldn't quite pull London's large cap index out of the red. Anglo American, up 7.0%, Glencore, up 3.4%, Fresnillo, up 3.0%, BHP Billiton, up 2.3%, and Rio Tinto, up 2.2%, ended as the best five blue-chip performers.

Mid-cap miners Evraz and Vedanta Resources also ended higher, with the former ending up 6.9% as according to traders, the miner and steel-maker was upgraded to Neutral from Underperform by Credit Suisse.

Vedanta finished up 2.1%. The miner said the majority of its commodity portfolio experienced a rise in production in the recently ended financial year, with its zinc operations outside of India and its oil and gas division the only units to experience falls in the year.

The main boost for miners were higher commodity prices amid a weaker dollar.

"The most recent meeting minutes from the Federal Reserve clearly show there's a lack of harmony within the Federal Open Market Committee, with speeches from several policymakers being mostly on the dovish side of the scale," said FOREX.com analyst Fawad Razaqzada. "Unless this week's US data helps to bring forward expectations about the next US Federal Reserve rate increase, things could go from bad to worse for the greenback."

The pound was at USD1.4260 at the close Monday, compared to the USD1.4125 at the London equities close on Friday. The euro was at USD1.1428, higher than the USD1.1414 seen on Friday.

Gold was standing at USD1,257.40 an ounce at the close against the USD1,240.44 at the same time Friday. Meanwhile, Brent crude was at USD42.90 a barrel at the close, having reached a high of USD43.02 earlier in the session, its highest level so far in 2016.

Stocks in New York were higher at the London close, with the Dow 30 up 0.3%, and the S&P 500 and the Nasdaq Composite both up 0.2%. Traditional curtain-raiser Alcoa will release its first-quarter results after the Wall Street close, kicking off the US earnings season.

European indices closed higher, with the CAC 40 in Paris and the DAX 30 in Frankfurt up 0.2% and 0.6% respectively.

SpreadEx analyst Connor Campbell said this was due to the news that Italy's largest banks were due to meet with the country's Treasury and central bank on Monday, as reported by Reuters citing five sources familiar with the matter, with the aim to thrash out a plan to set up a state-backed fund to buy bad loans and plug capital shortfalls at its ailing banks.

The news agency said Italy's government is anxious to assuage concerns about its banking system, which fared badly in financial stress tests carried out by the European Central Bank and is groaning under the weight of EUR360 billion in bad loans.

In Asia, continued strength in the Japanese yen hit the Nikkei 225 index in Tokyo, which ended down 0.4%, heightening expectations for more intervention from the Bank of Japan. The dollar hit a low of JPY107.62 early Monday, its lowest level since October 2014.

The Shanghai Composite closed up 1.6%, while the Hang Seng in Hong Kong index finished up 0.4%.

Though Monday was a light day in terms of economic data releases, investors will have a busy data calendar to focus on this week.

Inflation figures from Germany and the UK are due on Tuesday, while the same figures from the eurozone and the US are on Thursday. US retail sales and industrial production figures are due on Wednesday and Friday, respectively, while China releases its first-quarter gross domestic product data on Friday, alongside retail sales and industrial production.

The Bank of England releases its interest rates decision on Thursday. However, UK rates are expected to remain unchanged at 0.50%.

Also in the economic calendar Tuesday, UK's producer price index is due at 0930 BST. In the US, the import price index and the export price index are due at 1330 BST, while the Redbook index is due at 1355 BST. American Petroleum Institute weekly crude oil stock data are due at 2130 BST.

Elsewhere among UK companies, blue-chip emerging markets-focused bank Standard Chartered closed up 1.0%. It is looking to sell at least USD4.4 billion of assets in Asia, Bloomberg reported, citing people with knowledge of the matter. The London-based bank is in talks with potential buyers for about USD1.4 billion of stressed loans extended to Indian companies, the Bloomberg report said, with a sale underway of around USD3 billion of assets in the rest of Asia.

Supermarket chain Tesco said it will allow customers to use Brand Match coupons issued by rival J Sainsbury in its own stores, just days after Sainsbury's announced it is axing the scheme. Last week Sainsbury's said it was getting rid of the price comparison scheme in favour of lower regular prices, with the last of the coupons to be issued on April 26.

Brand Match compares prices on branded products with rival supermarket Asda Ltd. If, at the end of a customer's shop, it is found that they could have paid less for an identical basket of branded products at Asda, the customer would receive a coupon for the difference in price.

Shares in Tesco ended up 1.6%, while Sainsbury's closed up 0.8%.

Home and motor insurer Direct Line Insurance Group dropped 1.5% after being downgraded to EqualWeight from Overweight by Barclays. Direct Line has been one of the best-performing insurance stocks since its initial public offering in 2012, Barclays said, with the stock more than doubling from its 170 pence IPO price and returning two-thirds of the IPO price as dividends.

However, the bank said it now believes the stock "is fairly valued as we lower our estimates for the loss of its Nationwide and Sainsbury's contracts".

The FTSE 250 index ended down 0.3%, or 50.91 points, at 16,778.81 and the AIM All-Share rose 0.3%, or 2.26 points, at 721.65.

Pork producer Cranswick closed up 16%, at an all-time highest close of 2,537.10 pence. The group said it bought CCL Holdings and its East Anglia, England-based Crown Chicken poultry producing subsidiary from the Thacker family and management for GBP40 million. N+1 Singer upgraded the group to Buy from Hold and increased its price target on the stock to 2,400p from 2,050p. Investec increased its price target to 2,500p from 2,350p and maintained a Buy stance on the stock.

Property developer SEGRO closed up 2.5%, after Goldman Sachs lifted its recommendation on its shares to Buy from Neutral.

Meanwhile, Restaurant Group fell 4.2% to 350.80p after N+1 Singer cut its price target to 335.00p from 450.00p, and reiterated its Sell rating, saying the restaurant operator has "deep and structural" problems.

Aggreko closed down 0.9% at 1,035.00p. The mature power rental market is likely to put pressure on Aggreko's pricing and margins, said UBS, as it cut the temporary power stock to Sell from Neutral and decreased its price target to 800p from 1,050p.

In AIM, iodine produce Iofina shares almost doubled their value at 8.96p. The company said production rose on a like-for-like basis during the first quarter of the year while costs were "significantly lower", allowing the company to reaffirm its first-half production guidance.

In the UK corporate calendar, EKF Diagnostics Holdings, Ergomed, MP Evans, LiDCO Group and Flowtech Fluidpower publish full-year results. ASOS, Henderson International Income Trust, SCS Group and Nanoco Group release half-year results. Michael Page International, City of London Investment Group, Oxford Instruments, and Porvair issue trading statements.

By Daniel Ruiz; danielruiz@alliancenews.com

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