International Airlines Share News (IAG)

LONDON (Alliance News) - UK stock indices are trading higher Monday, following on from a positive Asian session amid easing concerns over the pro-democracy protests in Hong Kong.

The FTSE 100 is up 0.4% at 6,552.44, the FTSE 250 is up 0.4% at 15,291.37, and the AIM All-Share is up 0.4% at 742.85.

Major European markets are also higher, with the French CAC 40 up 0.2%, and the German DAX up 1.0%. The DAX is seeing particularly strong gains after having missed out on the broad gains on Friday as the market was closed for the German Day of Unity.

Government officials and student leaders in Hong Kong started preparatory talks for negotiations Monday, as pro-democracy demonstrations entered a second week. However, only about 100 protesters were still camped out on the streets as government employees returned to work unobstructed and middle schools reopened.

Standard Chartered and HSBC Holdings both closed some of their central Hong Kong bank branches last week when protester numbers were at their peak, sending shares lower, but Standard Chartered said Monday that the diminishing numbers on the streets have allowed it to reopen all of its branches.

Standard Chartered and HSBC shares are up 0.8% and 0.7% respectively.

Investor confidence in the eurozone continues to fall, with the Sentix index dropping faster than expected in October to negative 13.7, from negative 9.8 in September. Analysts had expected the index to fall to negative 11.5. The reading marks the lowest level of consumer confidence in the single currency block since May 2013.

The disappointing confidence data follows some disappointing German data earlier in the session that showed factory orders in Europe's traditional production powerhouse at their lowest level since 2009.

Although the data will serve to put pressure on the European Central Bank to do more to support growth in the region, which would normally hurt the euro, the single currency is a little higher against the dollar due to some broad dollar weakness following Friday's strong dollar rally, which was sparked by a strong US jobs report. The euro trades at USD1.2542, while the pound trades at USD1.5967.

The price of Brent oil reached a two year low of USD91.46 per barrel late on Friday. The price has risen slightly Monday, reaching USD92.63.

The airlines are performing well for a second day, having risen strongly Friday amid some strong trading figures from easyJet and International Consolidated Airlines Group and the lower oil price. IAG and easyJet are amongst the best FTSE 100 performers, up 1.8% and 1.9%, respectively. CitiGroup has raised its EasyJet recommendation to Buy, from Hold, and upped its price target by 4%.

The price of gold has continued to slide following Friday's unexpectedly strong US jobs report. The yellow metal reached a 2014 low of USD1,182.79 per ounce early Monday, causing some weakness in the mining stocks. Fresnillo is one of the worst performing blue chip stocks Monday, down 0.7%, with FTSE 250-listed African Barrick Gold down 2.4%, and Hochschild Mining down 2.8%.

Tesco shares are performing well, up 2.3%, as investors react positively to the appointment of two new non-executive directors. The troubled supermarket moved to bolster its board in the wake of recent accounting issues, adding the chief executive of food services company Compass PLC and a former CEO of furniture and household goods retailer IKEA Group.

"Both gentlemen are expert in their field, highly regarded by investors, and bring much needed international consumer market experience to the fold for the struggling supermarket group," says Shore Capital head of research Clive Black.

BG Group is up 1.2% after saying it has received a USD350 million payment from the Egyptian government, meaning its domestic receivables balance in the country has fallen to about USD1.2 billion. The Egyptian government has raised funds to help repay debts that it owes to the oil and gas sector in the wake of the disruption and turmoil caused by the Arab Spring, when Egypt's previous rulers were thrown out.

Lloyds Banking Group is down 0.3%, underperforming the FTSE 350 banking sector which is up 0.7%, amid reports that it is set to cut thousands of jobs and close more branches as it shifts towards a "digitisation" strategy and automates its business.

There's no more economic data of note to come Monday. Current futures trading indicates that US markets will open higher, with the DJIA pointed up 0.3%, the S&P 500 up 0.4%, and the Nasdaq Composite up 0.3%.

By Jon Darby; jondarby@alliancenews.com; @jondarby100

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