LONDON (Alliance News) - UK stocks are trading higher mid-morning Monday following a strong trading session in Asia on the back of doveish comments from the Governor of the People's Bank of China.
Kingfisher is the best-performing stock in the FTSE 100, up 2.9%, after the home improvement retailer said its deal to acquire France's Mr Bricolage will not proceed amid shareholder and board opposition to the terms of the deal.
Kingfisher entered a deal in July last year to acquire Mr Bricolage for EUR275 million. Last week, it warned the deal may be under threat after ANPF, which holds a 41.9% stake in the business, and Mr Bricolage's board said they have reservations about the deal.
Rolls-Royce Holdings is also amongst the best-performing blue-chip stocks, up 1.5%. The aerospace group said Air China has selected the British company's Trent 1000 engines and its aftercare support to power 15 new Boeing 787-9 Dreamliner aircraft, building on a relationship the two companies already have and adding to Rolls-Royce's USD1 billion order book.
CRH is one of the few fallers in the FTSE 100, down 1.7%. Eurocement Holding, a key shareholder in Holcim Ltd, plans to vote against the Swiss cement maker's merger with Lafarge SA unless the financial terms of the deal are altered, the Wall Street Journal said Sunday, quoting a person familiar with matter. Eurocement is the second-largest shareholder in Holcim Ltd with a 10.82% stake. CRH will acquire a large set of assets from the merged companies.
Wm Morrison Supermarkets shares trade down 0.7% after it was downgraded to Neutral from Buy by Goldman Sachs.
In the FTSE 250, Al Noor Hospitals Group is the worst performer, down 3.1%. The Abu Dhabi-based healthcare provider said its pretax profit and revenue both rose in 2014 as the group further expanded its operations. Al Noor said its pretax profit rose to USD83.9 million from USD61.5 million in 2013, with revenue increasing 23% to USD449.1 million from USD365 million. However, Numis cut the company to Hold from Add, saying that the consensus for the company's margins is too high.
Quindell, up 10%, is one of the best performers in the AIM All-Share index. Australian law firm Slater & Gordon Ltd has struck a deal to acquire the professional services arm of the insurance technology company for GBP637 million upfront. Slater & Gordon will pay a further, currently undisclosed, earn-out based on the performance of the professional services division's legacy noise-induced hearing loss cases.
The FTSE 100 trades up 0.6% at 6,892.42, the FTSE 250 is up 0.5% at 17,249.24, and the AIM All-Share is up 0.2% at 719.24.
Asian equity markets closed higher with the Nikkei ending up 0.7%, the Hang Seng closing up 1.5%, and the Shanghai Composite rising up 2.6% at 3,786.568, its highest level in seven years.
Asian stocks were lifted as the People's Bank of China Governor Zhou Xiaochuan indicated that the central bank could ease its monetary policy further if required.
"We need to be vigilant to see if the disinflation trend will continue to reach some sort of deflation or not," Xiaochuan said adding China has room to act if inflation continues to fall.
European stocks are trading higher too, with the CAC 40 in Paris up 0.9% and the DAX 30 in Frankfurt up 1.3%.
Investors will be keeping a close eye on developments in Greece where the country's government is due to present a new list of economic reforms to its international creditors. So far, three days of negotiations between Greece and its creditors on a previous list, which Athens says will boost state revenues by EUR3 billion, yielded no breakthrough, participants in the talks said Sunday in Brussels.
Instead of the promised concrete list of reforms, the Greek delegation presented documents in electronic form on mobile devices - written only Greek. "The list is much too vague, not credible and not verifiable," said one EU diplomat about the Greek government proposals, which were presented orally.
"We expect Greece to eventually fall in line, but meanwhile more time will be lost during which the Greek economy and Greek banks will likely weaken further, failing to enjoy the economic tailwinds for the rest of the Eurozone," says Holger Schmieding, chief economist at Berenberg.
Still ahead in the economic calendar, German consumer prices is due at 1300 BST, US personal income and spending data is at 1330 BST and pending home sales is at 1500 BST
Futures indicate a higher open for Wall Street. The DJIA and S&P 500 are pointed up 0.6%, and the Nasdaq 100 is indicated up 0.9%.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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26 Nov 2015 14:42
