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(Alliance News) - London stocks started the new week on a downbeat note, unable to get a boost from Wall Street's rebound on Friday, as sentiment in Asia overnight took a negative turn.
The FTSE 100 index was down 18.89 points, or 0.3%, at 7,008.18 early Monday. The mid-cap FTSE 250 index was down 125.41 points, or 0.6%, at 22,850.36. The AIM All-Share index was down 3.34 points, or 0.3%, at 1,227.79.
The Cboe UK 100 index was down 0.2% at 695.87. The Cboe 250 was down 0.5% at 20,700.51, and the Cboe Small Companies down 0.2% at 15,577.81.
"US markets rebounded after a torrid week, but the UK took its lead from a weaker showing overnight in Asia," said Richard Hunter, head of markets at Interactive Investor.
Mainland Europe also joined London in the red, with the CAC 40 in Paris down 0.5% and the DAX 40 in Frankfurt down 0.3% early Monday.
The mood was mixed in Asia on Monday, with the Hong Kong market struggling after reopening from a three-day holiday weekend, as embattled property giant China Evergrande suspended trading in its shares pending an announcement on a "major transaction".
Officials at the firm have been coping with a crisis that has left it more than USD300 billion in debt, fuelling fears of a contagion for the wider Chinese economy that some warn could spread globally.
The trading halt came as media reports said Hopson Development Holdings planned to buy a 51% stake in its property services arm. However, traders remain concerned Evergrande will miss payments on bond obligations, putting it in default.
Markets in mainland China remained shut for the week-long National Day holiday, while the Hang Seng index in Hong Kong tumbled 2.5%.
The Nikkei 225 index in Tokyo closed down 1.1%. Japan's Parliament voted Monday to approve Fumio Kishida as prime minister, with the new leader expected to announce a cabinet including both holdovers and fresh faces.
Bucking the negative trend in the Asian day, the S&P/ASX 200 in Sydney ended up 1.3%.
Meanwhile, sentiment towards UK equities was dented after Prime Minister Boris Johnson told Britons to expect empty shelves in the run-up to Christmas as he said the economy was in a "period of transition" following Brexit.
"A noisy and economically damaging Brexit followed by a worse than average response to the pandemic has left the UK public and financial markets with more than a faint impression that the UK is performing well below its potential," said Kallum Pickering, senior economist at Berenberg.
On the opening day of the Tory Party conference in Manchester, Johnson insisted the fuel crisis was finally "abating" after days of lengthy queues and filling stations running dry. But he repeatedly refused to say whether the shortages across the wider economy – due to a lack of lorry drivers and other workers – would be resolved in time for the festive season.
Sterling was quoted at USD1.3546 early Monday, soft against USD1.3550 at the London equities close on Friday.
The euro traded at USD1.1604, edging up from USD1.1592 late Friday. Against the yen, the dollar was higher at JPY111.16 versus JPY111.06.
Brent oil was trading at USD78.93 a barrel early Monday, up from USD78.44 late Friday. Gold was quoted at USD1,755.05 an ounce, pulling back from USD1,757.98 on Friday.
Towards the bottom of London's FTSE 100 index in early trade was Wm Morrison Supermarkets, falling 3.8% to 285.70 pence after Clayton, Dubilier & Rice emerged victorious in a weekend auction for the grocer.
The UK Takeover Panel said Fortress offered 286 pence per Morrisons ordinary share, while CD&R offered 287p – meaning its bid amounts to an offer of almost GBP7 billion. The final offer for the supermarket, which last month was promoted back into the FTSE 100 index of London blue-chips, will now be voted on by shareholders on October 19.
The takeover saga has dragged on since CD&R first made an approach for the Bradford-based grocer back in June.
Towards the top end of the FTSE 100 index were travel firms, rallying as the UK's relaxed and simplified travel rules come into effect.
Locations are now categorised as either on the red list or not - and there are UK press reports that the number of countries on the red list will be slashed to nine from 54 later in the week, with destinations such as Brazil, Mexico and South Africa expected to be opened up to quarantine-free travel.
Fully vaccinated residents – and unvaccinated under 18s – from more than 50 countries and territories can now enter the UK without needing to complete a pre-departure lateral flow test, take a day-eight post-arrival PCR test costing around GBP65, or self-isolate at home, with just a single day-two post-arrival test needed.
British Airways parent International Consolidated Airlines rose 2.1%, while jet engine maker Rolls-Royce rallied 1.7%.
Ryanair rose 2.4%, after revealing traffic more than doubled to 10.6 million in September from 5.2 million a year ago, while load factor improved to 81% from 71%. September's figure slipped from August's 11.1 million passengers, however.
Wizz Air, meanwhile, flew 3.0 million passengers in September, up 91% on a year ago, with an improved load factor of 78.4% versus 64.6%. Wizz Air shares were up 0.4%.
In the FTSE 250, Plus500 advanced 2.5% after guiding to a full-year earnings beat following "further positive momentum" in the third quarter of 2021.
"This positive momentum was highlighted by the consistent strength of Customer Income, a key underlying growth metric for Plus500, which has supported a strong revenue performance during the year to date," the company said.
The contracts-for-difference trading platform now expects full-year revenue and earnings before interest, tax, depreciation and amortisation to be ahead of current analyst forecasts, which stand at USD555.8 million and USD277.9 million, respectively, according to company-compiled consensus.
This will still fail to live up to 2020's tough comparatives, when revenue more than doubled to USD872.5 million, while Ebitda surged to USD515.9 million.
Elsewhere in London, finnCap shares rose 5.7%. The stockbroker expects interim revenue to grow more than 50%, and tightened full-year guidance
For the six months to September 30, finnCap expects to deliver total revenue of GBP31.8 million, up 55% year-on-year. This was driven by finnCap Cavendish, which saw revenue surge to GBP16.2 million from just GBP4.2 million a year ago, as it "clearly capitalised on a robust M&A market".
Revenue at finnCap Capital Markets dipped 4% to GBP15.6 million, performing well in a "comparatively quieter period".
"Our overall revenue growth shows the clear benefit of our strategy to diversify our products beyond ECM - undertaken over the past 3 years - to service the broader strategic and financial needs of ambitious growing companies. Our pipeline is healthy and we now feel confident in delivering a revenue outcome for the year within an upgraded range of GBP45-50 million," said Chief Executive Sam Smith.
finnCap previously guided to full-year revenue around GBP40 million to GBP50 million.
In Monday's economic calendar, there are US factory orders at 1500 BST.
By Lucy Heming; lucyheming@alliancenews.com
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