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LONDON (Alliance News) - UK stocks ended marginally lower Monday with the FTSE 100 pulled down by miners and broker downgrades to other stocks, as a thin economic calendar left investors struggling to find catalysts for entering the market.
"It has hardly been the most exciting day in global markets ? the lack of news has seen to that," said IG analyst Chris Beauchamp.
"Markets here and in the US have shifted uneasily between gains and losses during the day, emulating the pattern for the month as a whole. With volumes light for this holiday-shortened week, this choppy action is set to go on for a while yet," he added.
The FTSE 100 ended down 0.1%, or 5.06 points, at 6,184.58. The blue-chip index traded in a short range and drifted between gains and losses throughout the day. Weak trading among miners the main culprit for leaving large cap stocks in the red by the end of the day.
Antofagasta ended down 3.7% and Anglo American down 1.1%. Randgold Resources dropped 1.2% after Barclays removed the miner from its 'Top Picks' list.
The price of gold declined slightly on Monday, but it remains 17% higher so far in 2016. The metal was quoted at USD1,245.30 an ounce at the London equities close.
The oil price, meanwhile, ended the day without a clear direction. Brent closed slightly down at USD41.27 against USD41.68 at the close on Friday.
Outside the miners, Aviva ended down 2.2% after Bernstein downgraded the insurer to Market-Perform from Outperform.
Blue-chip grocer J Sainsbury rose on Monday following the news after the close on Friday that its rival bidder in the race to acquire Argos-owner Home Retail Group had dropped out. Steinhoff International Holdings, the South African group, withdrew from bidding for Home Retail, instead opting to acquire electricals retailer Darty.
This left the path clear for Sainsbury's to make a firm offer for Home Retail on the same terms as the indicative offer it had made before, rather than having to raise its bid to match the higher, all-cash offer Steinhoff had made. Sainsbury's offer for Home Retail values the group at GBP1.20 billion and will be paid in cash and shares.
Though the deal remained the same, however, Sainsbury's did upgrade the expected cost synergies it expects to generate. It hiked its estimate to GBP160.0 million in annual savings in the third year after completion, from GBP120.0 million previously.
Shares in Sainbury's ended up 1.2%, while mid-cap Home Retail closed up 1.2%.
The FTSE 250 ended down 0.2%, or 38.49 points, at 16,862.83, and the AIM All-Share finished flat, at 3,310.02.
Specialty chemicals company Synthomer saw its shares rise 6.0%, the best mid-cap performer, after it spent USD226.0 million on US-based chemicals company Hexion Performance Adhesives & Coatings, boosting its presence in the adhesives and coatings market and expanding its customer base.
The company also sold its dispersions unit in South Africa to Ferro for GBP13.0 million on Monday, offloading the division as it suffered against a competitive market and due to the further investments Synthomer would need to make in the business.
Meanwhile, shares in grocery delivery service Ocado Group dropped 2.9% following a report in The Times which said Tim Steiner, Ocado's founder and chief executive, be forced to sell part of his multimillion-pound stake amid a bitter divorce battle.
The Times reported that Steiner is facing a legal fight with his wife after he moved in with a Polish model who is almost 20 years his junior. Court documents reveal that Steiner is seeking a divorce on the ground of his wife's "unreasonable behaviour", The Times said, adding that a court battle and expensive settlement could force a sale of part of his 5% stake in Ocado.
Centamin ended down 3.6%. Shares in the gold miner suffered even though it said it could consider returning a "significant" amount of additional funds to shareholders if its exploration efforts fail after the miner increased its 2015 dividend despite reporting a dip in profit.
Centamin, which operates the Sukari gold mine in Egypt, said its pretax profit in 2015 fell to USD58.4 million from the USD81.6 million reported a year earlier as some one-off costs and tighter margins offset a rise in revenue to USD508.4 million from USD472.6 million. The group will pay a final dividend of 1.97 cents per share, giving a total dividend of 2.94 cents per share for the full year, a small rise from the maiden dividend paid in 2014 of 2.86 cents.
Among the mid-cap fallers, a slew of broker downgrades sent shares lower.
Halfords Group, the car and bike parts retailer, closed down 4.8% after being downgraded to Sell from Neutral by Swiss bank UBS, which also downgraded retailer N Brown Group to Neutral from Buy, sending its shares 6.1% lower. Tullow Oil, the oil and gas explorer, also suffered, down 1.4% after Jefferies downgraded it to Underperform from Hold.
Elsewhere, shares in Bankers Petroleum rose 72% after the company agreed to be acquired for CAD575.0 million by two companies with connections to a large Chinese firm. The price, of CAD2.20 per share, is a 98% premium to the closing share price of Bankers' Toronto-listed shares on Friday.
The Albania-focused oil and gas company has entered into a deal with 1958082 Alberta and Charter Power Investment, which are both affiliates of Geo-Jade Petroleum Corp, a major independent oil and gas company based in China.
Among the few economic releases Monday, the Rightmove UK house price index showed house rices in England and Wales climbed 1.3% month-over-month in March, following a 2.9% hike in the previous month. The average selling price passed GBP300,000 for the first time, as demand rose and supply remained tight, the agency said. On an annual basis, house prices grew at a faster pace of 7.6% in March, following a 7.3% spike in the preceding month.
The eurozone's current account surplus decreased for a second straight month in January, according to European Central Bank data. The adjusted current account surplus dropped to EUR25.4 billion from EUR28.6 billion in December. A year ago, the surplus was EUR30.1 billion. As a percentage of GDP, the current account surplus was 3% in the 12-month period ending January.
The euro initially rose against the dollar following the data. However, it gave back those gains by the end of the session. The euro was quoted at USD1.1250 at the London equities close, having stood at USD1.1278 Friday.
Meanwhile, the pound was at USD1.4393 at the close at the close, compared to USD1.4489 on Friday.
Europe's main indices ended mixed, with the CAC 40 in Paris down 0.8% and the DAX 30 flat.
Shares were mixed in New York at the London close, with the DJIA up 0.1%, the S&P 500 down 0.1% and the Nasdaq Composite up 0.1%.
Tuesday is expected to be more exciting in terms of economic releases, with Japan's Nikkei Purchasing Manufacturing Index due at 0200 GMT. Germany's business climate data are due at 0800 GMT. Meanwhile, Manufacturing, Services and Composite PMIs from France, Germany and the eurozone are due at 0800 GMT, 0830 GMT and 0900 GMT. ZEW survey data from Germany and the eurozone are expected at 1000 GMT.
In the UK, the retail price index is due at 0930 GMT, while the producer price index is due at 0930 GMT. UK's Consumer Price Index is due at 0930 GMT.
In the US, the Redbook index is due at 1255 GMT, while Markit's manufacturing PMI is due at 1345 GMT. The Richmond Fed manufacturing index is due at 1400 GMT. After the European equities close, the American Petroleum Institute weekly crude oil stock data are expected at 2030 GMT.
In the UK corporate calendar on Tuesday, building materials company Wolseley and housebuilder Bellway will publish interim results, while United Utilities Group and travel operator Thomas Cook Group will release trading statements.
Luxury goods retailer Jimmy Choo will publish annual results, as will personal injury claims company NAHL Group, newspaper publisher Johnston Press, waste management firm Augean, building services company T Clarke and mortgage adviser Mortgage Advice Bureau.
By Daniel Ruiz; danielruiz@alliancenews.com
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