Lonmin Share News (LMI)

LONDON (Alliance News) - London stocks closed higher on Monday, boosted by miners, a positive market open in the US, and a surge in oil prices.

The FTSE 100 ended up 0.2%, or 12.9 points, at 6,151.4, and the FTSE 250 closed up 0.3%, or 49.02 points, at 16,699.32. The AIM All-Share fell 0.15 point, to end at 724.34.

In Paris, the CAC 40 index closed down 0.2%, while the DAX 30 in Frankfurt was closed. Trading activity in Europe was subdued due to public holidays in France, Germany and Switzerland, which are celebrating Whit Monday.

US shares were higher at the London close, with the Dow Jones Industrial Average and the S&P 500 both up 0.7% and the Nasdaq Composite up 0.9%, overcoming an unexpected fall in business activity for New York manufacturers in May.

"US markets have soundly beaten their European peers over the past week, and today was no exception, with Wall Street beginning the new week in much better form than markets on this side of the Atlantic," Chris Beauchamp, senior market analyst at IG, said.

The Federal Reserve Bank of New York said its general business conditions index slid to a negative 9.0 in May from a positive 9.6 in April. A negative reading indicates a contraction in regional manufacturing activity.

Connor Campbell, a financial analyst at Spreadex, said the "one very clear source of growth" for the DJIA came courtesy of Warren Buffett's Berkshire Hathaway, which revealed that it acquired a USD1 billion stake in tech giant Apple during the first quarter. Apple shares were up 3.7% at the London equities close.

The strongest risers in the FTSE 100 included several miners. Anglo American, up 5.6%, Antofagasta, up 3.6%, Glencore, up 1.9%, BHP Billiton, up 2.3%, and Rio Tinto, up 1.0%, all felt the benefit after weak economic data from China raised hopes of further economic stimulus measures. In the FTSE 250, Kaz Minerals added 3.8%.

In the FTSE All-Share, South Africa-focused platinum miner Lonmin soared by 20% after reiterating its full year guidance and reporting that its pretax loss narrowed to USD21.0 million in the six months ended March 31, from USD118.0 million the corresponding half a year earlier.

China's industrial production and retail sales grew by less than expected in April, data from the National Bureau of Statistics showed, leading to questions about the health of the world's second-largest economy.

The National Bureau of Statistics attributed the slower industrial production growth to weak external demand, poor performance in the mining industry, rising commodity prices, and seasonal factors.

With Brent oil quoted at USD49.025 a barrel at the London equities close, up from USD47.85 a barrel Friday, BP rose 1.0%, and Royal Dutch Shell 'A' and 'B' shares both advanced 1.1%. In the FTSE 250, Tullow Oil shares rose 5.0%.

The North Sea oil benchmark hit six-month highs, rising to as much as USD49.43 earlier on Monday, boosted by supply problems in Nigeria. Higher oil prices helped US markets, according to IG's Beauchamp.

Meanwhile, a weaker US dollar helped commodity prices to rise, Beauchamp said. "Combined with this morning's good news for Lonmin the mining sector continues to comfortably outperform, a reasonable indicator of risk appetite," the analyst said.

At the London equities close, the pound was at USD1.4399, up from USD1.4353 the same stage on Friday. The euro traded at USD1.1329, up from USD1.1283 at the equities close Friday.

Higher gold prices spelled good news for producers of the precious metal, with Fresnillo, up 3.1%, and Randgold Resources up 1.9%. Gold was quoted at USD1,274.99 an ounce at the London equities close, up from USD1,269.64 the same stage on Friday.

Inmarsat, ending down 1.6% at 748.5p, was among the heaviest fallers in the FTSE 100, even as Haitong Research "hesitantly" increased its rating on the stock to Neutral from Sell. The Chinese investment bank said it's too bearish to think the satellite communications company won't announce any major contract signings this summer.

It "certainly matters" that significant sales growth from Inmarsat's Global Xpress satellites has yet to emerge, Haitong warned, especially considering that Inmarsat's chief executive officer said six months ago that global coverage was expected to be the take-off point for Global Xpress sales, and global coverage was achieved in December.

John Karidis, an analyst at Haitong, said another big setback with Inmarsat's Global Xpress business would prompt the investment bank to trim its perpetuity growth estimate to 1.5% from 2.1%, which would in turn imply a 590 pence fair value for the stock. That is below Haitong's current fair value estimate of 770p.

In the FTSE 250, Victrex, the specialty chemicals company, closed up 5.0%. Analysts at N+1 Singer said the company reported "highly reassuring" first-half results.

Victrex, which makes pipes, films and coatings, said it made a GBP47.5 million pretax profit in the six months ended March 31, down from GBP53.9 million the corresponding half a year earlier. Maintaining an interim dividend of 11.73p, Victrex said it remains "comfortable" with current expectations for the full year.

As a UK-based exporter, Victrex hedges against currency movements up to 12 months in advance. Although the company expects to take a GBP1.0 million hit to profit in the current year, it guided to a potential GBP10 million boost to profit in the next year from weakness in the pound.

"We remain at Buy and believe the shares are undervalued, given the medium term growth potential, attractive dividend and 20 year track record of success," N+1 said in a note.

Also ending higher was housebuilder Crest Nicholson, with the shares advancing 4.6%. The company said there have been signs that both sales prices and build costs are moderating in its first half.

Crest Nicholson said it is on track to reach its stated target of GBP1.00 billion revenue for the full year to October 31, having seen a good performance in the first half of its financial year.

ICAP, up 0.5%, set out its vision for a fintech future as NEX Group. The interdealer broker will be renamed on completing the sale of its hybrid voice broking and information business to one-time rival Tullett Prebon PLC.

Chief Executive Michael Spencer said the agreement with Tullett remains on track to complete later in 2016, with NEX to be supported by three main pillars: electronic markets, post trade, and the Euclid early-stage financial technology incubator.

The unveiling of the new name came as ICAP reported what look set to be its final set of full-year results in its existing form, with the company maintaining a dividend of 22.0 pence per share in the year ended March 31 even as pretax profit fell to GBP89 million from GBP95 million.

Revenue fell by 5.8% to GBP1.20 billion from GBP1.28 billion, ICAP said, with trading conditions still challenging due to historically low and negative interest rates set by central banks and continued efforts by investment bank clients to cut debt and reduce their appetite for taking risk.

"It has been a transformational year for ICAP and I believe that we are now on the cusp of one of the most exciting eras in the company's 30-year history," Spencer said.

In the economic calendar, Tuesday brings industrial production data from Japan at 0530 BST. The UK retail price index is due at 0930, along with the country's producer and consumer price index. European Union trade balance data follows at 1000 BST, with the German Buba monthly report due at 1100 BST.

US data, including for building permits, housing starts and the consumer price index, follows at 1330 BST, with API Weekly Crude Oil Stock data to come at 2130 BST.

In the UK corporate calendar, DCC, Land Securities Group, Vodafone Group, Premier Foods, First Derivatives, BTG Group, Speedy Hire, and Blinkx report full-year earnings. First-half results are due from Enterprise Inns, Treatt and Lakehouse, while Sportech, Hill & Smith Holdings and S&U publish trading statements. Georgia Healthcare Group reports first-quarter results.

By Samuel Agini; samagini@alliancenews.com; @samuelagini

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