LONDON MARKET OPEN: Miners Weigh On Stocks Amid Price Target Cuts

Tue, 09th Feb 2016 08:37

LONDON (Alliance News) - Shares in London were lower at the open Tuesday, with miners weighing on stock indices after price target cuts in the sector by Goldman Sachs, UBS, Deutsche Bank and HSBC.

The FTSE 100 index was down 0.3% at 5,674.81 points, the FTSE 250 down 0.4% at 15,443.89 and the AIM All-Share down 0.2% at 679.44. By contrast in Europe, with fewer big listed resource stocks, share were higher. Paris's CAC 40 was up 0.6% and the DAX 30 in Frankfurt was up 0.7%.

In London, Antofagasta was down 3.5% at 437.10 pence, after the miner was downgraded to Sell from Neutral by Goldman Sachs. Anglo American, down 4.2%, BHP Billiton, down 3.5%, Rio Tinto, down 3.4%, were hit by price target cuts by Goldman.

Randgold Resources was down 3.2%, giving up some of its gains on Monday, when the stock rose strongly after the company said 2015 was "one of the best years in the company's history" despite experiencing a large drop in profit as it continued to battle the downturn in the precious metals market.

Following the rally, brokers have cut recommendations on the stock, with UBS downgrading it to Neutral from Buy, HSBC cutting it to Hold from Buy and Deutsche Bank reducing it to Hold from Buy.

TUI Group was down 2.7%. The tourism company reported a narrower first-quarter underlying loss before interest, tax and amortisation, though it reported a sharp decline in demand for summer bookings to Turkey.

Bookings to Turkey are currently down by about 40%, the company said. "Based on current trading and due to the resilience of our integrated business model, we remain convinced that we will be able to deliver the announced underlying EBITA growth of at least 10% [on a constant currency basis] in the full financial year 2015/16," Chief Executive Fritz Joussen said.

TUI underlying EBITA loss was EUR101.7 million in the quarter ended December 31, versus EUR104.8 million the corresponding period the prior year. Revenue for the quarter rose 5.4% to EUR3.72 billion from EUR3.53 billion in the prior-year period.

At the other end of the FTSE 100 index, Legal & General Group was the best performer, up 3.6% as the company published details of its annuity bond portfolio ahead of its earnings for 2015, following inquiries from sell-side analysts and investors.

The life insurer and investment manager said the bond portfolio backing its annuity business amounted to GBP39.0 billion at the end of 2015, versus GBP40.7 billion at the end of 2014. Within its retirement arm, 4.4% of the bond portfolio was rated AAA, the top rating. About 28% of the portfolio was rated AA, around 33% at A and 31% at BBB. Bonds rated BB or below made up 3.2% of the portfolio.

Meanwhile, J Sainsbury continued its trend of being the only one of the UK big four supermarkets to achieve sales growth in the latest figures released by Kantar Worldpanel, as its sales increased for the sixth period in a row.

Shares in Sainsbury's were up 1.9%. Tesco was up 0.7%, while in the FTSE 250, WM Morrison Supermarkets was down 0.5%.

Like-for-like sales in the UK spiked 2.6% on year in January, the British Retail Consortium said. That shattered forecasts for an increase of 0.3% following the 0.1% gain in December. A spike in the sale of large ticket items was the primary cause for the jump in January, the BRC said.

Germany's industrial production dropped unexpectedly in December, figures published by Destatis revealed. Industrial production fell 1.2% from November, confounding expectations for an increase of 0.5%. This was the second consecutive fall in production. Output had decreased 0.1% in November. Excluding energy and construction, industrial output was down by 1.1% in December.

Still in the economic calendar Tuesday, UK trade balance data are at 0930 GMT. In the US, the Redbook index is due at 1355 GMT, while JOLTS job openings data are at 1500 GMT.

By Daniel Ruiz; danielruiz@alliancenews.com