Johnson Matthey Share News (JMAT)

LONDON (Alliance News) - Stocks ended lower in London on Tuesday in a session mostly driven by UK company news, as a negative open on Wall Street depressed European stock markets after they had been drifting between gains and losses most of the day.

The FTSE 100 index ended down 0.3% at 6,769.07, the FTSE 250 down 0.1% at 17,755.89, and the AIM All-Share flat at 758.21.

European indices also ended lower, with the CAC 40 in Paris down 0.7% and the DAX 30 in Frankfurt down 1.1%.

"Those looking for market moving news were bitterly disappointed this afternoon, as the global indices slid into the red due to the simple fact that there was no real reason not to," said Spreadex analyst Connor Campbell.

Wall Street was lower when the European equity markets closed, with the Dow Jones Industrial Average down 1.1%, the S&P 500 index down 0.4% and the Nasdaq Composite down 0.3%, after having closed at a new record high on Monday. US investors are awaiting results from technology giants Apple, Microsoft and Yahoo, all after the New York close.

In London, mining and non-life insurance were among the best performing sectors. Miners recovered from losses on Monday that had been caused by falling commodity prices, while insurers Admiral Group, RSA Insurance and Esure Group ended in the green after the AA said car and home insurance premiums are set to increase due to an upcoming lift in the UK's insurance premium tax.

The roadside assistance company said it thinks that premiums could go higher due to the UK government's move to increase the standard rate of insurance premium tax to 9.5% from 6%. The new tax rate will apply from November. The AA thinks the tax change will add GBP5 to the average home insurance policy, and GBP18 to the cost of a typical comprehensive car insurance policy.

Admiral, up 4.4%, and RSA Insurance, up 2.2%, were amongst the best performers in the FTSE 100, while Esure, up 1.9%, was among the biggest mid-cap gainers.

London-listed mining stocks rebounded Tuesday from selling that saw Randgold Resources falling by 4.7% and Fresnillo by 4.4% on Monday. The price of gold came under pressure amid speculation that the Federal Reserve will hike US interest rates as soon as September. Fed Chair Janet Yellen told Congress last week that the US economy is improving at a pace that should allow the central bank to begin normalizing rates by the year's end.

Also weighing on gold prices Monday was the disclosure of lower-than-expected gold reserves held by China. All that mixed together caused gold to slump to a five-year low of USD1,073.40 an ounce after trading at USD1,144.17 prior to the fall late last week. The precious metal recovered some ground on Tuesday and at the European stock markets close it was quoted at USD1,106.85 an ounce.

Fresnillo closed up 3.7% and Randgold Resources rose 2.0%, eroding some of the gains seen Monday. Mining peers Antofagasta, up 1.1%, and BHP Billiton, up 0.6%, also ended amongst the best blue-chip performers. BHP Billiton is due to release its operational review at 2330 BST Tuesday, while Fresnillo is expected to release its second-quarter production results on Wednesday.

Royal Mail fell 0.3%. The postal service operator said its revenue was flat in the first quarter of its current financial year, with a good performance in its parcels and logistics businesses but weaker revenue from its letters business. Royal Mail said revenue in its UKPIL division, which covers its UK parcels and letters delivery business, was down by 2%, as revenue in its UK parcels arm rose by 2% but revenue from its letters business fell by 4%. UK parcels volume rose by 3% in the quarter, while letters volume fell 5%.

In the FTSE 250, Croda International was up 5.6%. The specialty chemicals company said its pretax profit rose in the first half of 2015 on the back of better revenue across its operations, prompting it to hike its interim payout and sending its shares higher in London. It said its pretax profit for the six months to June 30 was GBP135.6 million, up from GBP125.1 million a year earlier, while revenue was up to GBP564.6 million from GBP537.4 million

Following the update, Charles Stanley upgraded Croda International to Hold from Reduce.

AO World shares rose 7.9%, the top FTSE 250 gainer, after the online domestic appliances retailer said it is on track with its long-term strategic progress as it delivered positive trading in the first few months of its new financial year. The company also said it continued to build brand awareness and is planning to expand its services in Europe.

AO World said that sales in the period from April 1 to date continue to "build satisfactorily" in Germany. In the UK, AO World said revenue grew 6.5% in the three months to June 30, with orders up 13.9%, while AO.com experienced revenue growth of 11.2%

IP Group added 2.2%. The intellectual property company said its Oxford Nanopore Technologies portfolio company has raised GBP70 million in a new financing round. IP Group's undiluted stake of 19.9% in Oxford Nanopore is now valued at GBP192.9 million, representing an unrealised fair value gain for IP Group on its investment of GBP50.3 million. IP invested another GBP13.9 million in Oxford Nanopore in the latest funding round.

On the red side of the mid-cap index, IG Group dropped 6.8%. The spread betting and contracts-for-difference company was the biggest decliner in the FTSE 250 after saying it is seeking a new chief executive as Tim Howkins is set to retire to relax and go travelling.

Howkins told reporters Tuesday that he will attend a balloon festival in Bristol and that Yosemite in California is top of his list of US national parks to visit.

Peter Hetherington, currently the group's chief operating officer, has put himself forward to replace Howkins, who served as chief financial officer before he was chief executive, and will take the top job on an interim basis until a permanent successor is confirmed.

In a busy corporate calendar Wednesday, ARM Holdings releases half-year results, easyJet issues a third-quarter interim management statement, and Johnson Matthey and Land Securities Group issue first-quarter interim management statements. Qinetiq Group and PayPoint publish interim management statements. Tungsten Corp releases full-year results and Morgan Advanced Materials half-year results. Sage Group and Euromoney Institutional Investor provide third-quarter interim management statements, Fenner releases a third-quarter trading statement, and TalkTalk Telecom Group and Energy Assets Group publish first-quarter interim management statements.

In the economic calendar, the Bank of England will release at 0930 BST the minutes from its most recent monetary policy meeting. In the US, the housing price index is due at 1400 BST, US Markit purchasing manager's Composite and Services indices are due at 1445 BST, and US existing home sales are due at 1500 BST. EIA Crude Oil stocks are due at 1530 BST.

By Daniel Ruiz; danielruiz@alliancenews.com

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