LONDON MARKET MIDDAY: US Stocks Seen Down Ahead Of Fed Speeches

LONDON (Alliance News) - London stocks were mixed Tuesday midday, while Wall Street was called for a negative open ahead of key speeches by Federal Reserve members, as the US central bank's monetary policy meeting looms next week.

The FTSE 100 index was down 0.4% at 6,325.01 points, dragged down by its commodity-related stocks. The FTSE 250 was up 0.2% at 16.943.51 and the AIM All-Share was up 0.2% at 744.89. In Europe, the CAC 40 index in Paris was down 1.1% and the DAX 30 in Frankfurt was off 0.7%.

Asian stocks ended mixed, with the Hang Seng in Hong Kong down 0.4% and the Shanghai Composite up 1.1%. The Japanese Nikkei 225 index closed up 0.4%.

Shares in New York were pointed lower, with the Dow Jones Industrial Average and the S&P 500 both indicated down 0.4%, while the Nasdaq 100 was called down 0.3%.

US investors will continue to focus on earnings updates, with technology companies Verizon and Yahoo and restaurant chain Chipotle releasing third-quarter numbers.

The Bank of New York Mellon announced a higher profit in its third quarter compared to last year. The company said its bottom line rose to USD828 million, or USD0.74 per share. This was up from USD734 million, or USD0.64 per share, in last year's third quarter. Analysts had expected the company to earn USD0.71 per share, according figures compiled by Thomson Reuters.

But the focus for the day is likely to be on US central banker speeches ahead of the Federal Open Market Committee's monetary policy meeting scheduled for October 27-28.

Starting the day is FOMC Governor Jerome Powell, speaking in New York at 1415 BST. New York Fed President William Dudley is due up at 1430 BST. The speeches culminate with Fed Chair Janet Yellen, who will make an address in Washington at 1600 BST

Before that, US housing starts and building permits data are due at 1330 BST.

"Today's US housing starts and building permits figures for September are expected to show a continuation of the post-first-quarter pickup in housing market activity," said Lloyds Bank senior economist Jonathan Thomas.

"However, given the recent signs of a deepening division within the [FOMC] about the prospects of a near-term rise in inflation, today's comments by Powell, who has not yet publicly opined on the policy outlook since the September meeting, and Dudley are likely to attract more scrutiny as signals about the FOMC's centre of gravity," added Thomas.

In London, commodity stocks were taking a hit, with oil-related companies in the red amid falling oil prices. Brent oil prices fell below the USD50 a barrel line, standing at USD48.38 a barrel Tuesday midday. West Texas Intermediate also was lower at USD46.24 a barrel.

Royal Dutch Shell 'B' shares were down 1.6%, BP was down 1.5% and BG Group down 1.0%.

Miners were continuing the losses seen on Monday, with Antofagasta down 2.2%, BHP Billiton falling 2.1%, Glencore down 1.8% and Rio Tinto off 1.6%.

Elsewhere on the London Stock Exchange, Intercontinental Hotels Group was the best blue-chip performer, up 5.2% after the company said it achieved record hotel signings in the third quarter of 2015. However, it reported a drop in revenue per available room due to the effects of currency translation, although it grew in three of its four operating regions on a constant exchange rate basis.

The hotel operator, which owns brands including Holiday Inn, Crowne Plaza and InterContinental Hotels, said global RevPAR in the third quarter fell 0.4% on the same period the year before due to the strengthening of the dollar, although it grew 4.8% at constant exchange rates, led by a 3.6% rise in room rates.

Regionally, RevPAR grew 4.3% in the Americas at constant exchange rates, 7.8% in Europe and 7.1% in Asia, the Middle East and Africa, but was down 0.7% in Greater China.

Also in the FTSE 100, shares in Whitbread were up 2.4%. The company said that double-digit sales growth for both Premier Inn and Costa Coffee pushed the company's interim profit higher, leading the group to express confidence in its medium-term targets as it continues to invest heavily in both of the two booming consumer businesses.

Whitbread said its pretax profit for the six months to August 27 was GBP254.9 million, up from GBP241.8 million a year earlier. The latest half was hit by the group booking GBP25.2 million in exceptional charges on onerous leases for sold business and accelerated amortisation costs on its IT systems.

Following Whitbread's update, Numis upgraded the company to Add from Hold.

In the FTSE 250, AVEVA Group also was benefiting from broker upgrades, up 4.0% at 2,089.00 pence. Berenberg lifted its rating on the engineering software company to Buy from Hold and increased its price target to 2,450 pence from 1,977p. The broker said it was on optimism that the reverse takeover of the company by France's Schneider Electric will go through, despite market uncertainty which appears to have affected AVEVA's share price.

Al Noor Hospitals Group was up 1.6%. The Middle East hospitals operator attracted another suitor, confirming Abu Dhabi-based VPS Healthcare has made a "highly preliminary" indication of interest in acquiring the company.

It follows on from Al Noor last week agreeing a reverse takeover by South Africa's Mediclinic and comes as its FTSE 250 rival, NMC Health, whose shares were up 3.2%, continues to pursue a merger.

On AIM, SolGold was up 17%. The company said it has received the highest-grade assay results so far for its Cascabel copper-gold porphyry project in Ecuador. SolGold said drilling at Hole 12 showed intersects of up to 1.75% copper. It also said the Aguinaga prospect is maturing as a drill target and has a similar geophysical signature to the giant Alumbrera copper mine in Argentina.

Meanwhile, Rurelec was off 38%. The power producer and IPSA Group, the South African power plant developer and operator, both released statements noting that a key shareholder in both has been placed into administration.

Sterling Trust, the shareholder placed into administration, owns a 54% stake in Rurelec and a 29.6% stake in IPSA. IPSA shares are currently suspended.

By Daniel Ruiz; danielruiz@alliancenews.com

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