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LONDON (Alliance News) - BT Group shares closed higher on Monday amid a mixed trading session for UK stocks, with the telecommunications company reporting higher third-quarter profit and revealing a new organisational structure, while on the currency markets the pound rose against the dollar following weak US economic data and upbeat figures from the UK.

The FTSE 100 index closed down 0.4% at 6,060.10, the FTSE 250 flat at 16,489.26, while the AIM All-Share up 0.4% at 696.16. In Europe, the CAC 40 in Paris ended down 0.6% and the DAX 30 in Frankfurt down 0.4%.

BT ended up 2.8% after the telecommunications and pay-TV company confirmed its guidance for the full financial year. The group reported an increase in pretax profit in its third quarter and year to date, and outlined a new organisational structure following its acquisition of mobile network EE.

For the quarter to end-December BT reported a pretax profit of GBP862 million, up from GBP694 million a year before, as revenue rose to GBP4.64 billion from GBP4.48 billion. This takes BT's pretax profit for the first nine months of its financial year to GBP2.14 billion, up from GBP1.8 billion a year before, on revenue of GBP13.25 billion, up from GBP13.21 billion.

BT said that, following its acquisition of EE, it will have a new organisational structure with effect from April. Under the new structure, it will have six lines of business, comprising Consumer, EE, Business & Public Sector, Global Services, Wholesale & Ventures and Openreach.

Fellow pay-TV company Sky rose 1.4%, after Citigroup added the stock to its Europe Focus List.

Shares in Irish low-cost airline Ryanair Holdings ended up 1.6%. The group said its post-tax profit, revenue and customer numbers all increased in the third quarter to the end of December, and it affirmed its guidance for its full financial year, albeit saying the outcome would be dependent on no unforeseen events hitting operations.

Ryanair said its profit after tax for the three months to the end of December was EUR103.0 million, more than double the EUR49.0 million it made a year earlier. Revenue rose to EUR1.33 billion from EUR1.13 billion, as the number of passengers carried increased to 24.9 million from 20.8 million.

The group also said it will launch a EUR800.0 million share buyback, which will start later this week and last about nine months. Ryanair said the buyback will raise the total amount it has returned to shareholders to over EUR4.0 billion in the past eight years.

London-listed air carriers finished among the best blue-chip performers, with easyJet up 2.0% and International Consolidated Airlines Group up 2.4%.

Lower crude prices, which retreated from the highs seen in early trade, supported airlines shares but dragged on oil producers.

North Sea benchmark Brent oil was quoted at USD34.73 a barrel at the London close, having touched USD36.22 a barrel, a level it hadn't seen since so far in the year. US benchmark West Texas Intermediate was at USD32.05 a barrel, also down from USD34.10 a barrel reached earlier in the day.

The FTSE 350 Oil & Gas Producers Sector index closed down 1.6%, after seven consecutive sessions of gains. BP ended down 3.2%, while Royal Dutch Shell 'B' shares ended down 1.4%, and BG Group closed down 0.5%. Mid-cap Cairn Energy ended down 1.6%.

BP will be the first major London-listed oil and gas company to report its final results on Tuesday, ahead of results from Royal Dutch Shell on Wednesday and BG Group, which will imminently complete its merger with Shell, due on Thursday. BP's results will therefore provide the first insight into the impact of lower oil prices on the major producers during 2015.

According to consensus estimates provided by the company, analysts are expecting BP to report an underlying replacement cost profit of only USD730.0 million in the last quarter of 2015, representing a 66% drop from USD2.20 billion in the same quarter a year earlier and a fall of more than 59% from the USD1.80 billion booked in the third quarter of 2015.

Life insurer Prudential ended at the bottom of the FTSE 100, down 3.5%. The group said the chief executive of its M&G Investments fund management arm is to retire from his role and said it has poached the chief investment officer of Aberdeen Asset Management to replace him.

Michael McLintock will retire as the chief executive of M&G and as an executive director of the group this year, though no exact date was given for his departure, after 19 years with the company. He will be replaced by Anne Richards, currently the chief investment officer and head of Aberdeen's European, Middle East and African operations.

Shares in Aberdeen Asset Management dropped 0.7%.

In the FTSE 250, Home Retail Group led the mid-cap gainers, up 8.0% after Bloomberg reported that supermarket J Sainsbury is close to reaching an agreement to acquire the owner of Argos and Homebase and could get an extension to the offer deadline in order to hash out the final details. Shares in Sainsbury's ended down 0.6%.

Citing four people familiar with the matter, Bloomberg said the pair have narrowed their differences over how much Sainsbury's should pay for Home Retail. The sources said Home Retail may now ask the UK Takeover Panel to extend the deadline for Sainsbury's to make a firm offer for the company, which is due to fall on Tuesday.

No final decision has been made, and the deal could yet fall apart, the sources told Bloomberg.

The Financial Times had reported earlier that Sainsbury's was facing pressure to increase its offer for Home Retail from two major shareholders.

US stocks were lower at the London close, with the Dow 30 down 0.4%, the S&P 500 down 0.4% and the Nasdaq Composite down 0.3%.

Alphabet, the new corporate umbrella for Google and all of its diverse businesses, is expected to report its first set of results under that name after the US market close on Monday, providing investors with a fourth-quarter update. Barbie doll maker Mattel also is expected to publish a fourth-quarter update after the US market close.

The dollar retreated against the pound after a weak set of US economic data that followed better-than-expected manufacturing and mortgage approvals data from the UK.

The US Commerce Department said in a report that US construction spending rose much less than expected in December, with a jump in spending on public construction partly offset by a drop in spending on private construction. The report said construction spending inched up 0.1% in December, having fallen 0.6% in November. Economists had expected spending to climb by 0.6%.

Meanwhile, US manufacturing activity contracted for the fourth straight month in January, according to a report released by the Institute for Supply Management. The ISM said its purchasing manager's index rose to 48.2 in January from a downwardly revised 48.0 in December. However, economists expected the index to climb to 48.3. A reading below 50 continues to indicate a contraction in manufacturing activity.

UK manufacturing growth quickened unexpectedly at the start of the year to the strongest level in three months. Data from Markit Economics showed that the Markit/Chartered Institute of Procurement & Supply Purchasing Managers' Index for manufacturing rose to 52.9 in January from 52.1 in December. Economists had expected the index to fall to 51.8.

Data from the Bank of England showed that UK mortgage approvals rose unexpectedly to 70,837 in December from 70,424 in November. This was the highest since August 2015. Economists had forecast approvals to fall to 69,600 in December.

At the London close, sterling was quoted at USD1.4370.

The euro area manufacturing sector growth slowed as estimated in January with rates of expansion in output, new orders and new export business all easing at the start of the year, final survey data from Markit showed Monday. The final manufacturing PMI fell to 52.3 in January from 53.2 in December. The reading matched flash estimate, having remained above the 50.0 mark for 31 consecutive months.

The euro was quoted at USD1.0889 at the London close. Meanwhile, the gold price was at USD1,126.39 an ounce.

Also in the UK corporate calendar Tuesday, Ocado Group releases full-year results, while TalkTalk Telecom Group issues a trading statement. St Modwen Properties, Mattioli Woods, Polar Capital Global Financials Trust and Low & Bonar publish full-year results, while NWF Group and Alumasc Group release half-year results.

In the economic calendar, German unemployment data are due at 0855 GMT, while UK's construction PMI is at 0930 GMT. Eurozone unemployment rate and producer price index are due at 1000 GMT. In the US, the Redbook index is due at 1355 GMT.

By Daniel Ruiz; danielruiz@alliancenews.com

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