LONDON (Alliance News) - Stocks in the UK were trading lower just after the open Monday, with commodity stocks leading the rout and Playtech shares diving after its takeover of Plus500 was called off.
Gambling software provider Playtech said it has terminated its agreement to acquire contracts-for-difference broker Plus500 over concerns it will not be able to secure UK Financial Conduct Authority approval before the end of 2015, and warned that the collapse of the Plus500 deal increases the risk that its purchase of Ava Trade also may get cancelled. If so, Playtech would lose it USD5 million deposit on Ava Trade.
In response, Plus500 outlined its plans for an independent future, proposing an interim dividend of USD0.2121 per share, and a share buyback programme.
Playtech was the worst performer in the FTSE 250, down 12%, while Plus500 was down 8.0%.
The FTSE 100 index traded down 0.9% at 6,277.73, the FTSE 250 was down 0.5% at 17,106.16, and the AIM All-Share was down 0.2% at 729.26.
In Europe, the French CAC 40 was down 0.6% and the German DAX 30 traded down 0.4%.
In Asia, the Shanghai Composite closed down 0.6% and the Hang Seng ended down 0.4%. The Japanese market is closed for Labor Thanksgiving day.
Mining stocks were the main drag on London early Monday morning, with Glencore down 5.0%, Anglo American down 4.0% and Antofagasta, down 3.5%, all amongst the biggest fallers due to the continued commodity price slide.
"The commodity rout continues (copper has gapped down), sending metals and oil lower as the USD creeps north on expectations of EUR-weakening [European Central Bank] stimulus next week and a US rate rise mid-month," said Michael can Dulken, Head of Research at Accendo Markets.
Oil companies Nostrum Oil & Gas, down 6.3%, Tullow Oil, down 3.1%, BP, down 1.7% and Royal Dutch Shell 'B', down 1.5% were down due to a fall in the price of oil. Just after the London open, Brent oil was quoted at USD43.77 a barrel, while West Texas Intermediate was quoted at USD40.59 a barrel.
In the FTSE 250, Home Retail Group was the best performer, up 7.0%. The Sunday Times reported a number of private equity firms are considering making GBP1.0 billion takeover bids for Home Retail, the owner of catalogue retailer Argos and DIY and garden centre chain Homebase
Several retail industry figures have been asked to advise on potential bids for the company in the wake of the profit warning that Home Retail issued in October, which it blamed on uncertainty around Black Friday promotions. Investment banking sources said the company may look attractive to bidders given the sharp fall in its share price during 2015, combined with a robust cash position and a large customer loan book.
Outsourcing company Mitie Group was down 2.4% after it said its pretax profit rose in the first half due to restructuring charges booked a year earlier not repeating, but its headline profit was weaker due to tougher conditions for its healthcare business.
The FTSE 250-listed group said its pretax profit for the first half to the end of September was GBP45.1 million, compared to a GBP1.3 million loss booked a year earlier due to restructuring charges it booked as it restructured itself into a services-focused business.
Stripping out one-offs, however, pretax profit fell to GBP50.1 million from GBP57.0 million in the half due to weaker conditions for Mitie's healthcare business, which was hit by unprofitable contracts the group has now exited.
Alecto Minerals was down 29% to 0.085 pence in the AIM All-Share index. The company said it has struck a deal to acquire the Matala and Dunrobin Gold Mines in Zambia in cash and shares and said it will launch a GBP650,000 placing.
Alecto said the gold mines acquired have good potential to be developed to production in the near to medium term. The two mines have an aggregate 760,000 ounces of gold in place, according to resource estimates, at an average grade of 2.3 grams per tonne.
Alecto will raise GBP650,000 via a placing to fund the cash element of the acquisition and back work at the projects, plus its proposed joint venture in Mali. It has issued 812.5 million shares at 0.08p per share.
In the economic calendar, there are a number of preliminary manufacturing and services data for November due to be released from Europe.
Already released were French PMIs which showed a worsening in the service sector, but an improvement in manufacturing in November. The flash Markit PMI for the services came in at 51.3, falling short of expectations of 52.6 and lower than the October reading of 52.7. The manufacturing index rose to 50.8 in November from 50.6 in October. The reading also was just ahead of the consensus of 50.7. A reading above 50.0 is signals an expansion in the sector.
German PMI figures showed the German manufacturing and service sector both expanded in November. The flash reading from Markit showed the service sector PMI came in at 55.6 from 54.5 in October. The reading was ahead of consensus which expected the index to fall to 54.3. The manufacturing index also came ahead of forecasts, at 52.6, against consensus and October's print of 52.1.
Eurozone PMIs were due at 0900 GMT.
Monday afternoon, the Federal Reserve Bank of Chicago's national activity index for October is scheduled to be published at 1330 GMT, shortly ahead of the US Markit manufacturing PMI reading at 1445 GMT.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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