ALM.L Share News (ALM)

LONDON (Alliance News) - The strong start to the fourth quarter continued for UK stock prices Monday, spurred by a rally on Wall Street on Friday which offset dejection for some caused by England's early exit from its home Rugby World Cup tournament.

At midday, the FTSE 100 index traded up 2.1% at 6,256.51 with no stocks in the red. The FTSE 250 was up 1.6% at 17,058.22 and the AIM All-Share was up 0.6% at 733.10.

European stocks were performing even better, with the CAC 40 in Paris up 3.2% and the DAX 30 in Frankfurt up 2.3%.

The gains in European stocks came as eurozone retail sales were reported in flat in August after recovering in the prior month, according to a report from Eurostat. Economists had forecast sales to fall 0.1% after rising 0.6% in July. The rate for July was revised up from the initial estimate of 0.4%.

Growth in food sales doubled to 0.8% from 0.4% in July, while non-food sales slid 0.3%, reversing a 0.5% rise in the prior month. On a yearly basis, retail sales growth slowed to 2.3% in August from revised 3% in July. Nonetheless, it was better than the expected increase of 1.7%.

However, final data from Markit showed eurozone private sector growth slowed more than initially estimated to a four-month low in September.

The final composite output index fell to 53.6 in September from 54.3 in August and below the flash score of 53.9. The services Purchasing Managers' Index came in at seven-month low of 53.7 in September, below the earlier flash estimate of 54 and August's 54.4.

German data also disappointed, with the pace of growth in the service sector slowing in September and falling short of the flash estimates. The PMI score came in at 54.1, slightly below the 54.3 flash estimate and August's reading of 54.9.

Meanwhile, the UK's services sector growth slowed unexpectedly to the lowest level in nearly two-and-a-half years in September. Survey results from Markit Economics and the Chartered Institute of Procurement & Supply showed that services purchasing managers' index fell to 53.3 in September from 55.6 in the previous month. Economists had expected the index to increase to 56.3.

The latest reading was the lowest since April 2013. Moreover, the average reading for the index over the third quarter as a whole came in at 55.4, which was the weakest since the second quarter of 2013.

The pound fell sharply against other major currencies following the data. It hit a low of USD1.5166 against the dollar, and EUR1.3469 against the euro.

US Markit services and composite PMI are at 1445 BST, and the ISM non-manufacturing PMI is at 1500 BST, alongside the US labor market conditions index.

Ahead of the PMI readings, US stock futures pointed to a positive start on Wall Street. The DJIA and S&P 500 were both indicated up 0.5% and the Nasdaq 100 was pointed up 0.7%.

On Friday in New York, the Dow 30 closed up 1.2%, the S&P 500 up 1.4% and the Nasdaq Composite up 1.7%. The Dow had traded down 1.6% at one stage on Friday after a weaker than expected US jobs report. Analysts said the turnaround was the index's biggest in four years.

Mining and oil stocks were the top gainers in the FTSE 100 and 250 midday Monday. Glencore continued to see volatility in its share price and was the best blue-chip performer, trading up 11%. The miner and trading house released a statement noting the higher share price and increased volumes in its Hong Kong-listed shares, saying it knows of no reason for the movement. Glencore shares closed up 18% in Hong Kong.

Oil companies, Royal Dutch Shell 'A', up 3.9%, BP, up 3.4%, and Premier Oil, up 8.6%, gained following a rise in oil prices. Brent oil was up 1.1% on Monday to USD48.64 a barrel, while West Texas Intermediate was up 1.0% to USD45.99 a barrel.

England's exit from the Rugby World Cup, the first time a host nation has been knocked out at the group stage, came as a surprise to most and is expected to have an impact on pub companies, sports retailers and ITV, where the World Cup is being broadcast.

However, ITV shares were up 1.5% with Liberum saying the that TV advertising slots tend to be booked four to six weeks in advance so virtually all the slots for October would already have been booked and audience share is unlikely to be hit too hard as other Home Nations, such as Wales, remain in the tournament.

Nevertheless, Jasper Lawler, market analyst at CMC Markets, said that ITV is estimated to lose as much as GBP1 million in ad revenue per match, with many fans likely to tune out now that the England team is no longer involved.

Among pub operators, shares in west London-based Fuller, Smith & Turner were down 2.1%.

Rolls-Royce Holdings was up 2.1% after the aerospace and engineering group confirmed a press report that it will cut a further 400 jobs in its Marine business by the end of 2016.

Rolls-Royce said the job cuts, which are being made in addition to the 600 already announced in the Marine business, were the result of the continued reduced demand for its services and products due to the downturn in the oil and gas market.

The group said profit and revenue guidance for the Marine business for 2015 remains unchanged and said the cuts will generate full-year savings of GBP40 million annually, with the majority of the early savings to be re-invested in research and development work.

Allied Minds was one of the best FTSE 250 performers, up 8.2%. The US-focused science and technology development and commercialisation company said its subsidiary Precision Biopsy has raised USD33.6 million to accelerate the commercial expansion of its ClariCore Biopsy product for prostate biopsy procedures.

Allied Minds contributed around GBP16.6 million to Precision Biopsy in the funding. As a result the value of Allied Minds' 68.3% holding in Precision Biopsy has increased to USD61.8 million from USD45.6 million, it said. ClariCore is a device designed to provide accurate real-time classification of prostate tissue during biopsy procedures.

Playtech traded down 3.3% after the gaming technology and financial trading company said it has received a letter from the Central Bank of Ireland opposing its proposed USD105 million deal to acquire contracts-for-difference broker Ava Trade. The company said it will be seeking clarification from the Irish central bank and will engage with it to discuss some issues raised in the letter which it believes can be addressed to the central bank's satisfaction.

Xchanging shares shot up 50% to 166.25 pence after the business process outsourcing company confirmed it has received takeover offers from FTSE 100-listed rival Capita and US buyout house Apollo Global Management. After having a couple of bids rejected, Capita has made a final bid of 160p per share for the company, valuing it at GBP396.6 million, while Apollo has made an offer of 170p per share, or GBP421.3 million in total.

Capita said it likely would fund the deal, if it progresses, with a share placing. Capita shares were up 1.3% to 1,229.00p.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

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