Astrazeneca Share News (AZN)

LONDON (Alliance News) - UK stocks erased early gains and ended lower Monday, while Wall Street traded in negative territory, with analysts unable to settle on a common view as to whether the US Federal Reserve will raise interest rates this month or later in the year.

On the London Stock Exchange, chip designer ARM Holdings was the best performer in the FTSE 100, while commodities company Glencore took a hit after the suspension of copper and cobalt production at the Katanga mine in the Democratic Republic of Congo, in which the miner holds a big stake.

"Lack of data-inspired lethargy and a less than stellar US open combined to send the markets lower this afternoon, with the European indices well away from their session highs," said Spreadex analyst Connor Campbell.

The FTSE 100 ended down 0.5% at 6,084.59, having reached an intraday peak of 6,190.36 points after the open. The FTSE 250 closed down 0.3% at 16,925.69 and the AIM All-Share finished down 0.2% at 732.06.

European major stock indices closed mixed, with the CAC 40 down 0.7% and the DAX 30 up 0.1%.

Though futures had pointed to a positive open, US stocks were lower at the London close, failing to extend the gains seen on Friday. The DJIA was down 0.5%, the S&P 500 down 0.6% and the Nasdaq Composite down 0.6%.

The US Federal Open Market Committee will hold an important two-day monetary policy later this week, following which some market commentators believe it will announce the first US rate hike since 2006. But expectations are finely balanced going into the week, and the event is likely to heighten uncertainty in the market. The interest rate decision will be revealed on Thursday.

Analysts at Nomura do not expect the Federal Reserve to raise interest rates this week, and the broker expects a December "lift-off", with Nomura citing "material" uncertainty about the outlook for inflation and the recent sell off in global financial markets.

Meanwhile, Societe Generale analyst Kit Juckes said that if the FOMC keeps interest rates on hold, "any delay would be just that - a decision to hold fire for a month or three in the light of weak emerging market growth and volatile asset markets."

"On the 'go now' side of the argument (which we subscribe to wholeheartedly), the US economy is strong enough to withstand the start of policy normalisation and the risks of waiting outweigh the risk of a negative shock if they do act," said Juckes. "On the 'wait' side, there's the lack of inflation and the belief that super-easy policy is needed to boost demand."

There are still concerns about China's economic growth in the wake of a stock market sell-off in August that spread across Asia, before making its way to Europe and the US. That unease has led to some calls for the Fed to put off a rate rise for the time being.

On Monday, the Nikkei 225 in Tokyo closed down 1.6%, while China's major stock indices ended mixed, with the Shanghai Composite down 2.7% and the Hang Seng index in Hong Kong up 0.3%.

There were also mixed economic data from China on Sunday. Chinese industrial production was up by 6.1% year-on-year in August, according to the country's National Bureau of Statistics. This was marginally better than the 6.0% growth reported in July, but below expectations of 6.4%.

In addition, fixed-asset investment in non-rural areas of the country rose by 10.9% in the first eight months of the year, but this was below expectations of 11.1% growth and slower than the 11.2% increase measured for the first seven months.

However, retail sales in China grew 10.8% year-on-year in August, beating the 10.5% consensus and July reading.

Among London-listed stocks, ARM was the best blue-chip performer, up 1.8%.

Accendo Markets head of research Mike van Dulken said that shares in the chip designer were benefiting from some positive reviews released over the weekend of Apple's latest product launches and updates, including to the iPhone and iPad, announced at an event last Wednesday. The California-based tech giant is one of the most important customers for ARM.

Shares in AstraZeneca came off its intraday highs, after benefiting from an upgrade by Deutsche Bank to Buy from Hold. The stock ended up 0.8% at 4,320.34 pence, having reached a peak of 4,373.10p in earlier trade.

Deutsche said it was confident the company will be able to return to strong growth, with analyst Richard Parkes saying this will be driven by execution on its strategy for its growth platforms - diabetes, respiratory, Japan, emerging markets, and heart drug Brilinta - and delivery on its significantly improved pipeline.

Glencore ended down 2.0% after the multi-commodities miner said the board of the company behind the Katanga mine in the Democratic Republic of Congo, in which it holds 74%, has confirmed it will suspend copper and cobalt production at the site for 18 months. Glencore had flagged the decision last week when it announced plans to improve its financial condition.

However, mining peer BHP Billiton, up 1.2%, ended on the green after being upgraded to Buy from Hold by Jefferies.

In the FTSE 250, fund managers Man Group, up 1.6%, and Henderson Group, up 1.9%, ended among the biggest gainers after Exane BNP initiated them both at Outperform.

On AIM, Motive Television finished up 15%. The company said it plans to make its TabletTV product available on Apple's recently announced new Apple TV platform. TabletTV allows users to watch and record free-over-the air television without a contract or subscription. Motive Television is a registered Apple developer.

Meanwhile, HaiKe Chemical Group was down 35%. The China-based specialty chemicals company said its first half trading was in line with its expectations but said it has taken a hit so far in the second six months from the turbulence in the Chinese economy. The group said it is "at risk" of failing to achieve a full-year profit and said it recorded losses in both July and August due to the tough economic conditions.

In the UK corporate calendar Tuesday, Kingfisher and Ocado Group publish half-year results, while Wilmington releases full-year results.
Manx Telecom, NetplayTV, TLA Worldwide, Synety Group, Accesso Technology Group, IQE and Restore release half-year results. Meanwhile, Porvair issues a trading statement.

In the economic calendar, the Bank of Japan releases its interest rate decision while UK consumer price index and producer price index are both due at 0930 BST. German ZEW surveys of economic sentiment are due at 1000 BST while Eurozone trade balance is also due at 100 BST.

In the US, retail sales data are expected at 1330 BST, while the NY Empire State manufacturing index is also due at 1330 BST. US Industrial production is due at 1415 BST, and US business inventories are expected at 1500 BST.

By Daniel Ruiz; danielruiz@alliancenews.com

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