LONDON MARKET OPEN: Battered Stocks "Crawl To Finishing Line" Of 2015

Thu, 31st Dec 2015 08:43

LONDON (Alliance News) - London-listed equities were extending declines at the open of a shortened New Year's Eve session Thursday, having broken a run of four consecutive positive sessions on Wednesday, as investors look ahead to 2016.

The FTSE 100 was down 0.2% at 6,258.87 points, while the FTSE 250 was down 0.3% at 17,475.98 and the AIM All-share index was almost perfectly flat at 735.45.

In Europe, Paris and Frankfurt both were closed for trading Thursday.

"What an inauspicious way to end 2015," said Connor Campbell, financial analyst at Spreadex. "With the DAX already on holiday and Brent crude still lingering below USD37 per barrel, the FTSE is crawling towards the finishing line looking bruised and battered," he added.

On Wednesday in London, the FTSE 100 and FTSE 250 ended the day markedly lower, snapping a run of four consecutive positive sessions for the large- and mid-cap indices, with China-exposed stocks leading declines as the yuan set a four-and-a-half-year low against the dollar.

FTSE 100 retailer Sports Direct International was one of just a handful of risers shortly after the stock market open, but has since slipped back into the red, down 0.2%.

The company confirmed it will pay its staff above the UK National Minimum Wage starting from January 1, 2016. It said this will affect both its directly employed UK employees and directly engaged casual workers, and will cost the company around GBP10 million annually.

Earlier the Daily Mirror reported that Sports Direct boss Mike Ashley had pledged to raise workers' salaries by 15 pence an hour from 2016. This will benefit around 15,000 employees on zero-hours contracts and 4,000 agency staff, Daily Mirror said, and comes after Sports Direct was criticised for its treatment of staff.

The UK government's soon-to-be introduced National Living Wage starts at GBP7.20 an hour for all workers over the age of 25, rising to GBP9.00 an hour in 2020.

Sports Direct's new rates mean workers aged 21 and over will go from GBP6.70 an hour to GBP6.85 an hour, while over 25s will be paid GBP7.35 an hour. The rate for 18 to 20-year-olds will rise to GBP5.45 from GBP5.30 an hour, according to the Mirror.

"I'm making a New Year's resolution pledge to the Daily Mirror - and I'm deadly serious," Ashley told the newspaper. "I want to see Sports Direct become the best high street retail employer, after John Lewis," he said.

FTSE 100-listed Experian, down 1.2%, and FTSE 250-listed AVEVA Group, Halma and Micro Focus International down 1.4%, 0.4% and 0.2%, respectively, were among their respective indices' fallers after going ex-dividend, meaning new buyers no longer qualify for the latest dividend payout.

In the AIM All-Share index, fluorspar miner Tertiary Minerals was one of the biggest risers in the small-cap index, up 14% at 2.20 pence, after it said Managing Director Richard Clemmey bought shares in the company on Wednesday. Clemmey bought 366,171 shares at 1.82p a share, taking his total holding up to 372,504 shares.

Serabi Gold was another riser, up 3.6% at 2.7p, after it said it has secured a new USD5.0 million short-term working capital convertible loan facility. The Brazil-focused gold miner said the loan will expire in January 2017 and may be drawn down in three separate installments of an initial USD2.0 milllion, plus two further instalments of USD1.5 million apiece.

The loan has been provided by Fratelli Investments and will be convertible into Serabi shares at 3.6 pence per share. Serabi shares closed at 2.72p on Wednesday. The company said the loan will provide it with extra working capital to bring the Sao Chico mine in Brazil into full production.

Shares in Genel Energy were down 2.1% after it said it plugged and abandoned an exploration well offshore the Ivory Coast after it found no hydrocarbons.

In the data calendar Thursday, European Central Bank monetary policy meeting accounts are scheduled to be released at 1230 GMT. The accounts contain an overview of financial market, economic and monetary developments and are followed by a summary of the discussion on the economic and monetary analyses and on the monetary policy stance.

In the US, weekly initial and continuing jobs data are published at 1330 GMT, ahead of the Chicago purchasing managers' index reading for December at 1445 GMT.

Still, "in focus today is the fact that it's New Year's Eve," said Augustin Eden at Accendo Markets. "Rather than data fallout, we?re likely to hear much about what?s to come in 2016," he added.

In the forex market, ahead of the data and the UK equity market open Thursday, the pound trades at USD1.4837 and the euro trades at USD1.3590, having stood at USD1.4834 and USD1.0916, respectively, at the stock market close on Wednesday.

Gold, meanwhile, trades at USD1,062.08 an ounce ahead of the UK stock market open, while Brent oil trades at USD36.69 a barrel. The commodities were quoted at USD1,061.60 an ounce and USD36.60 a barrel, respectively at the UK equity market close on Wednesday.

By James Kemp; jameskemp@alliancenews.com; @jamespkemp