Int.biotech. Share News (IBT)

LONDON (Alliance News) - London's main indices ended lower Monday, failing to recover from a weak open that saw worse-than-expected Chinese trade data and broker downgrades dig a hole for mining stocks.

In a light day of company and economic news, the FTSE 100 finished down 0.4% at 7,064.30, retreating from a record closing high of 7,089.77 and intraday high of 7,095.36, both set on Friday.

The FTSE 250 ended down 0.3% at 17,829.83 Monday, breaking a six-day rally and also off a record high close and intraday high of 17,875.11 on Friday. Meanwhile, the AIM All-Share index outperformed Monday, closing up 0.5% at 739.03.

European indices were mixed, with the CAC 40 in Paris up 0.3% at 5,254.12, a new closing high, while the DAX 30 in Frankfurt slipped 0.3%, both having reached new record intraday highs on Friday.

London equities opened lower Monday after China's exports logged an unexpected double-digit decline in March and imports fell by more than expected, weighing on the outlook for economic growth in the first quarter.

Exports decreased 14.6% in March from last year, data from the General Administration of Customs showed. Shipments were expected to grow 9%. In February, the Customs Office said exports surged 48.3%, while imports plunged 20.5%. Imports dropped 12.3% in March, faster than an expected fall of 10%, suggesting weak domestic demand.

The trade surplus fell sharply to USD3.1 billion, below February's surplus of USD60.6 billion and a USD40.1 billion forecast by economists.

Furthermore, the World Bank forecast that economic growth in developing countries in East Asia and Pacific will slow this year despite the benefits of weak oil prices and the continued recovery in developed economies.

China's growth is expected to moderate to 7.1% in 2015 and to 7.0% in 2016, according to the official lender. This reflects continued efforts to address financial vulnerabilities and a gradual shift to a more sustainable path of growth. Earlier the bank had estimated 7.2% growth for 2015 and 7.1% next year.

Asian shares ended mixed Monday, despite the trade data, with Shanghai and Hong Kong shares extending recent sharp gains on expectation for more economic stimulus measures from Beijing.

"If bad news is good news, then China's latest growth figures are a thing of beauty," said Guy Foster, Brewin Dolphin's head of research. "The weakness implies that Q1 GDP...will be soft. It also suggests that Chinese companies have been struggling with competitiveness as China has more or less tracked the dollar."

Investors will be looking closely at Wednesday's Chinese GDP reading, which is expected to show that the economy grew 7.0% year-on-year in the first quarter of 2015. In the fourth quarter of 2014, growth was 7.3%, the weakest since early 2009.

The Chinese government is targeting 7.0% growth for 2015 after seeing a 7.4% expansion in 2014, which was the slowest since 1990.

In London, miners were hit by the Chinese data, but also by Citigroup downgrades in the sector, with the FTSE 350 Mining sector index ending down 1.2%.

The US bank removed BHP Billiton from its Europe Focus List, downgrading the miner to Neutral from Buy and cutting its price target to 1,550 pence from 1,800p. Citigroup also downgraded Anglo American to Sell from Neutral, cutting its price target to 900p from 1,350p, while downgrading Rio Tinto to Neutral from Buy, cutting its price target to 2,850p from 3,600p.

BHP Billiton ended down 4.3% at 1,400.34p, Anglo American fell 2.3% at 998.70p and Rio Tinto lost 0.8% at 2,814.00p. Meanwhile, Antofagasta declined 2.5% and Glencore by 1.6%.

FTSE 250-listed Vedanta Resources ended down 0.1% at 517.50p, while Lonmin closed down 3.4% at 125.60p. Citigroup downgraded Vedanta to Sell from Neutral, cutting its price target to 430p from 410p. The bank has also downgraded Lonmin to Neutral from Buy, cutting its price target to 127p from 145p.

At the close of European stock markets, Wall Street was trading higher, with the DJIA and S&P 500 both up 0.1% and the Nasdaq Composite up 0.5%.

Among non-mining stocks in London, Aviva rose 1.2% to 561.50p. Barclays, JP Morgan and Morgan Stanley resumed coverage of the insurer with Overweight ratings. Monday was Aviva's first trading session after the completion of its takeover of Friends Life Group. Barclays set a price target of 621 pence, with Morgan Stanley eyeing 633p.

Merlin Entertainments replaced Friends Life in the FTSE 100 Monday, and ended its first session in the blue-chip index up 0.8%.

Oil companies, including BG Group, up 0.5%, Royal Dutch Shell 'B', up 0.5%, and Weir Group, up 0.6%, benefited from a rise in oil prices. Brent oil was trading up at USD58.24 a barrel at London equity markets close, while West Texas Intermediate also was higher at USD51.83 a barrel.

Pearson, down 1.9% was one of the worst FTSE 100 performers after Jefferies downgraded the publisher to Underperform from Buy.

Easyjet, down 1.2%, poached Halfords Group Chief Financial Officer Andrew Findlay to the same position at the low-cost airline, with the car-parts and bicycles retailer starting a search for a replacement. Findlay will remain at Halfords until the end of October, having been CFO of the company since February 1, 2011. Prior to that he held finance roles at Marks & Spencer Group, the London Stock Exchange Group and Cable & Wireless Communications.

Halfords ended down 1.7%, one of the biggest fallers in the FTSE 250.

ICAP did the same to Hiscox. ICAP, down 1.2%, poached Hiscox Chief Financial Officer Stuart Bridges for the same role at the interdealer broker, with the specialist insurer also starting a search for his successor. Bridges has been at Hiscox for 16 years, but will leave at the end of August once the company reports its half-year results in late July. Hiscox ended down 0.4%.

In the economic calendar Tuesday, Italian consumer price index is due at 0900 BST. UK inflation data is at 0930 BST, while eurozone industrial production is at 1000 BST. In the US, the producer price index and retail sales are at 1330 BST. US Redbook index is at 1355 BST.

In the corporate calendar Tuesday, Ashmore Group releases an interim management statement, while Michael Page International publishes a first quarter interim management statement. Poundland issues a fourth quarter trading statement, while Polymetal International releases its full-year results. Porvair releases an interim management statement and International Biotechnology Trust publishes half-year results. Horizon Discovery Group, Keywords Studios and MP Evans publish full-year results.

By Daniel Ruiz; danielruiz@alliancenews.com

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