BH Macro GBP Share News (BHMG)

LONDON (Alliance News) - Stock prices in London were mixed on Tuesday at midday, with the FTSE 100 index adding to its losses from Monday, ahead of the major risk events of Wednesday's OPEC production meeting and Sunday's Italian referendum on constitutional reforms.

The FTSE 100 index was down 0.6%, or 37.33 points, at 6,762.14. The blue-chip index was being dragged mainly by the heavyweight banking and mining sectors, while oil producers were suffering from volatility in crude prices.

The FTSE 250 index of mid-caps was flat at 17,526.27 points, and the AIM All-Share was down 0.2% at 820.12.

The BATS UK 100 index was down 0.4% at 11,439.66, the BATS 250 was 0.1% higher at 15,906.27 and the BATS Small Companies down 8.5% at 10,041.60.

"Investors nerves are...frayed by OPEC member bipolarism (optimism one minute, pessimism the next), coupled with weekend political risk in the form of Austro-Italian votes that could have far reaching ramifications across the troubled [eurozone] and add to an existing tally of populist discontent in the wake of Brexit and [US president-elect Donald] Trump," said Accendo Markets' head of research, Michael van Dulken.

Oil prices remain volatile in the run-up to the Organisation of Petroleum Exporting Countries meeting in Vienna on Wednesday to discuss plans to limit production to lift low oil prices.

The aim of the meeting is to come to a final agreement about how to share the burden of limiting total production to between 32.5 million and 33.0 million barrels per day, a plan that OPEC had decided upon in principle in September.

Brent oil was quoted at USD47.48 at midday, having slipped slightly overnight. It stood at USD48.30 a barrel at the London equities close on Monday.

Royal Dutch Shell 'A' shares were down 1.5%, while BP shares were down 1.6%.

Investors also remain wary of the Italian referendum on constitutional reforms to be held this Sunday. The market fears that a 'no' vote could trigger a political and economic crisis in Italy with implications for the entire European banking sector.

On Sunday, the Financial Times said recapitalization plans for eight Italian lenders - including troubled Monte dei Paschi di Siena and seven regional banks - are likely to fail with a 'no' vote, as an ensuing government crisis would sap investors' confidence in the Italian economy.

Also on Sunday, Austria holds a re-run of its general election, after the far-right Freedom Party successfully claimed that ballots were counted without proper supervision in many towns. In May, green candidate Alexander Van der Bellen had won by a margin of less than 31,000 votes. If Freedom Party's candidate Norbert Hofer wins the new election, he would be the first far-right populist to become head of state in Western Europe.

The CAC 40 stock index in Paris was up 0.6% and the DAX 30 in Frankfurt up 0.2%.

In New York, the Dow Jones Industrial Average and S&P 500 index were both called for a higher open, pointed up 0.2%, while the Nasdaq 100 was seen up 0.1% In the US economic calendar, personal consumption expenditure prices are at 1330 GMT and consumer confidence at 1500 GMT.

Back in London, the FTSE 350 Mining sector index was down 1.6%, with the four worst FTSE 100 performers being miners. Accendo Market's van Dulken said this was due to a fall in metal prices.

Royal Bank of Scotland Group was down 1.1% after Credit Suisse initiated the state-backed lender at Under-Perform, while emerging markets lender Standard Chartered was 0.5% lower, also having been started at Under-Perform by Credit Suisse.

Analysts at Credit Suisse started coverage of Lloyds Banking Group and HSBC Holdings with Neutral ratings. Lloyds and HSBC were down 1.0% and 0.5%, respectively.

However, Barclays was outperforming its peers, up 1.5% after Credit Suisse initiated it at Outperform.

Housebuilders were benefiting from a better-than-expected UK mortgage approval data. Barratt Developments was up 2.6%, Persimmon up 1.9% and Taylor Wimpey up 0.9%.

UK mortgage approvals increased to a seven-month high in October, the Bank of England reported. The number of mortgages approvals increased to 67,518 in October from 63,594 in September. This was the highest since March, when approvals totalled 69,994. The expected level was 65,000.

In the FTSE 250, SSP Group was up 8.8%. The travel hub food and drink concessions operator reported growth in profit in its recently ended financial year thanks to good growth in air passenger travel and said its current financial year has started in line with expectations.

BH Macro was 5.7% higher. The fund proposed a tender offer to buy back shares and, if more than two thirds of shareholders accept, will seek to liquidate the company. If the tender offer proceeds rather than a full liquidation, the company will seek to change its structure and management agreement with the fund's manager. It has launched the offer for up to 100% of each class of its issued share capital at a price equivalent to 96% of its net asset value at the end of February 2017.

TalkTalk Telecom Group, up 4.5%. The mobile and broadband provider's shares rose after UK media and telecoms regulator Ofcom confirmed it will proceed with requiring the legal separation of blue-chip competitor BT Group from its Openreach network infrastructure arm, after BT failed to offer acceptable remedies to the watchdog's competition concerns. BT shares were up 1.3%.

Aberdeen Asset Management was down 4.0%. The emerging markets-focused asset manager was continuing its losses from Monday, when it had said it is continuing its cost-cutting programme as profit dropped in its latest financial year, with its funds facing outflows in volatile markets. The stock closed down 4.0% on Monday. Peer Ashmore Group was down 3.9% on Tuesday.

By Daniel Ruiz; danielruiz@alliancenews.com

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