AGK.L Share News (AGK)

LONDON (Alliance News) - Shares in London were slightly lower Monday midday, with strong trading in miners limiting the losses, whilst investors in New York prepare for aluminium company Alcoa to kick off the US earnings season.

The FTSE 100 was down 0.1%, or 3.01 points, at 6,201.40. In Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were up 0.5% and 1.0%, respectively.

"News that the Italian government is moving to stabilise the country's shaky banking sector likely provided at least part of the catalyst for the morning's sudden change in tone, also helping to explain why the FTSE 100 has been left behind," noted SpreadEx analyst Connor Campbell.

Italy's largest banks will meet with the country's Treasury and central bank on Monday to thrash out a plan to set up a state-backed fund to buy bad loans and plug capital shortfalls at its ailing banks, Reuters reported on Sunday, citing five sources familiar with the matter.

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 New York on Monday, the Dow 30, S&P 500 and the Nasdaq 100 all were pointed up 0.3%.

Traditional curtain-raiser Alcoa will release its first-quarter results after the Wall Street close. Before that, William Dudley, president of the Federal Reserve Bank of New York, will make a speech at 1425 BST.

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 yen is once more back at the forefront of investors mind-sets, with the currency seemingly taking over as the barometer of choice for traders seeking to understand the risk appetite of the wider markets," said IG analyst Joshua Mahony, who noted that "the more the yen strengthens, the more we will see BoJ intervention."

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

Consumer prices in China rose 2.3% year-on-year in March, the National Bureau of Statistics said. That was unchanged from the February reading, although it was shy of expectations for an increase of 2.4%. On a monthly basis, inflation fell 0.4% after jumping 1.6% in the previous month.

The bureau also said that producer prices were down 4.3% in March versus forecasts for 4.6% decline, having falling 4.9% in the previous month.

Mining stocks were higher in London at midday, with Anglo American up 4.0%, Glencore up 2.1% and Rio Tinto up 1.7%. Evraz was the best performer in the FTSE 250, up 6.7%. According to traders, the miner and steel-maker was upgraded to Neutral from Underperform by Credit Suisse.

Fellow mid-cap miner Vedanta Resources was up 2.4%. The miner said Monday 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 dollar is weaker this morning, which is helping commodities and should be a boon for mining and related stocks today," noted Accendo Markets head of research Mike van Dulken.

The pound was standing at USD1.4231 Monday midday, higher than USD1.4125 at the London equities close on Friday. Gold was at USD1,250.10 an ounce at midday, compared to the USD1,240.44 at the close Friday.

Meanwhile, Brent crude was at USD41.92 a barrel against the USD41.79 on Friday, having touched in early trade Monday a high of USD42.42 a barrel, close to its highest level so far in 2016 of USD42.51 a barrel.

Blue-chip emerging markets-focused bank Standard Chartered was another gainer, up 1.3%. 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.

Home and motor insurer Direct Line Insurance Group was down 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, we believe the stock is now fairly valued as we lower our estimates for the loss of its Nationwide and Sainsbury's contracts," Barclays said in a note.

The FTSE 250 index was down 0.1% at 16,817.04 and the AIM All-Share was up 0.3% at 721.74.

Cranswick was up 6.1% at 2,315.00p. The pork producer 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 was up 2.5%, after Goldman Sachs lifted its recommendation on its shares to Buy from Neutral.

Meanwhile, Aggreko was down 2.4% at 1,019.00p. 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.

Restaurant Group was down 2.1% at 358.20p 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.

In Main Market, iodine produce Iofina shares were almost doubling their value at 9.46p. 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.

By Daniel Ruiz; danielruiz@alliancenews.com

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