Barclays Share News (BARC)

LONDON (Alliance News) - UK's main indices were lower Monday midday amid a combination of profit taking in mining stocks and risk aversion among investors ahead of the European Central Bank monetary policy meeting Thursday.

The FTSE 100 was down 0.9%, or 61.56 points, at 6,137.87.

The FTSE 250 was down 0.5%, or 82.68 points at 16,848.51. Meanwhile, the AIM All-Share was up 0.2%, or 1.28 points at 703.77. In Europe, the CAC 40 index in Paris and the DAX 30 in Frankfurt were both down 1.0%

"Given the lightness of the calendar for the next few days, the common sense decision would be to go and enjoy the spring sunshine ahead of the ECB on Thursday," said IG analyst Chris Beauchamp. "However, common sense is not a quality found in abundance in stock markets. We could easily see this negative drift continue for the next two days or so, before the next leg of the rally begins".

The market has big expectations for ECB President Mario Draghi to announce a bumper stimulus package to support the waning eurozone economy.

Analysts at Japanese financial firm Nomura expect the ECB to cut its deposit rate by "at least" 10 basis points. The broker also expects the central bank to increase its Asset Purchase Programme by EUR10 billion per month, to EUR70 billion per month, and extend the programme for a further 3 months to the end of June 2017.

The ECB's deposit rate currently sits at -0.3% and its monthly asset purchases are EUR60 billion a month.

Others such as French bank Societe Generale and Hamburg-based bank Berenberg believe the cut to the deposit rate could go further to 20bps, with the latter even expecting the asset buying programme to increase to EUR80 billion a month and to be extended by 6 months.

Miners are weighing on the FTSE 100, with the FTSE 350 Mining sector index falling for the first time after six sessions of gains. The index was dropping 1.7%.

"Modest losses in mining names today are likely down to the absence of blockbuster news from China over the weekend, but again, profit taking is still the most probable cause of declines, given how far the rally has gone in some of these firms," noted IG's Beauchamp.

However, other mining stocks were also hit by broker rating changes, as gold miner Randgold Resources, which was down 5.1% after being cut to Equal-Weight from Overweight by Morgan Stanley. Meanwhile, Anglo American, down 4.3%, was downgraded to Sell from Neutral by UBS.

US stocks were expected to track the losses in Europe, with the DJIA seen down 0.3%, the S&P 500 pointed down 0.4% and the Nasdaq 100 called down 0.5%.

In the US economic calendar, US labour market conditions are at 1500 GMT, while US consumer credit data are at 2000 GMT. The focus will also be on Federal Reserve Vice Chairman Stanley Fischer, who will be making a speech in Washington at 1330 GMT.

Already released is Japan's leading index, which declined for the third consecutive month in January to the lowest level in four years, preliminary survey results from the Cabinet Office showed. The leading index, which measures the future economic activity, fell more-than-expected to 101.4 in January from 101.8 in December. This was the lowest reading since December 2012, when the score was 98.9. The expected reading was 101.6.

Meanwhile, eurozone investor confidence dropped to the lowest level since April 2015, according to a report from Frankfurt-based research group Sentix. The investor sentiment index fell to 5.5 in March from 6.0 in February. The index dropped for the third consecutive month in March and reached its lowest level since April 2015. It was expected to inch up to a score of 8.

Elsewhere on the London Stock Exchange, Old Mutual was the biggest gainer in the blue-chip index, up 7.4%. The Anglo-South African financial services group said "all options" are being considered for its strategic review but no decision has yet been made, in response to a report from Sky News that the company is planning a break up of its operations.

Sky News reported Old Mutual is planning to split into four standalone units. This would comprise its stake in South African lender Nedbank, its UK-focused wealth management unit, its South Africa-based emerging markets operation, and its institutional asset management business.

Shore Capital's Eamonn Flanagan believes that a disposal or demerger of Old Mutual Wealth is a possibility. "The interaction with the South African life and banking operations is pretty limited and, indeed, probably introduces the conglomerate discount that the stock has traded on for quite a while," Flanagan said.

WPP was up 1.5%, attracting investors after its price target was lifted by Goldman Sachs, Nomura and SocGen.

In the red, emerging markets lender Standard Chartered, which last month reported its first annual loss since 1989, could suffer from "weak" profitability for at least two years, according to Moody's Investors Service.

Moody's issued the warning as it downgraded several ratings on Standard Chartered's debt. The lender made a USD2.2 billion net loss in 2015, as restructuring costs were accompanied by concerns about China's economic slowdown and depressed commodity prices.

Shares in Standard Chartered were down 3.3%.

Peer lender Barclays was down 2.5% after being downgraded to Hold from Buy by Deutsche Bank, while JPMorgan cut Barclays's price target.

Meanwhile, InterContinental Hotels Group, which operates Holiday Inn and Crowne Plaza hotels, was dropping 2.2% after Citigroup downgraded the group's shares to Sell from Neutral.

In the FTSE 250, shipping services group Clarkson was down 3.4% after the company said it will increase its dividend once again after it achieved a 26% rise in profit and a 27% lift in revenue during 2015. The company said its pretax profit rose to GBP31.8 million in 2015 from GBP25.2 million in 2014, as revenue climbed to GBP301.8 million from GBP237.9 million.

However, Clarkson warned on turbulence in shipping and offshore markets in its outlook for 2016. "The challenges witnessed across the global shipping markets have continued into 2016. The macro-economic environment remains very uncertain and as such we do not anticipate any changes to our markets in the near term," said Chairman James Hughes-Hallett.

On the Main Market, shares in electronic components supplier APC Technology Group were up 28%. The company said it appointed Art Russell as its chief financial officer, and its Advanced Power Components business saw its best first half performance in terms of bookings since 2011.

The company said the Advanced Power Components business saw bookings of GBP7.2 million in the half year to end-March, up 28% compared to the comparative period the previous year. It did not provide the comparative figure. This included bookings of GBP1.8 million in February, which were the highest ever recorded in a single month, it said.

By Daniel Ruiz; danielruiz@alliancenews.com

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