LONDON (Alliance News) - Stocks in London got off to a lower start Tuesday, with miners and oil companies bearing the brunt of the losses following a slump in oil prices.
The FTSE 100 traded down 1.0%, or 61.68 points, to 6,103.04. The index was dragged by its heavily weighted commodity sector which tracked a fall in oil prices overnight.
Brent was at USD37.34 a barrel just after open Tuesday, against USD38.03 a barrel at the London stock market close on Monday.
Connor Campbell, financial analyst at Spreadex, said the fall in oil prices was due to Iran's continued intransigence on the issue over an output freeze, in turn weighing on the "perpetually precarious UK commodity sector".
In the FTSE 100, miners BHP Billiton, down 4.2%, Anglo American, down 3.9%, and oil major Royal Dutch Shell 'A', down 2.3%, were all among the worst performers. The FTSE 250's biggest decliners included miner Vedanta Resources, down 3.3%, and oil and gas producer Tullow Oil, down 2.3%.
The FTSE 250 index was off 0.6% at 16,748.08 and the AIM All-Share was flat at 712.21. The CAC 40 index in Paris was down 1.7% and the DAX 30 in Frankfurt was down 1.9%.
In Asia Tuesday, the Shanghai and Hong Kong markets return to trade after a holiday weekend. The Shanghai Composite ended up 1.5%, while the Hang Seng is down 1.7%. The Nikkei 225 index in Tokyo closed down 2.4%.
In UK corporate news, Electrocomponents led the mid-cap gainers, up 3.7%, after it said its headline pretax profit for its financial year that ended in March will hit the top end of market expectations after good sales in the UK and Europe.
The electronics distributor said headline pretax profit, which removes pension and restructuring costs, will be at the top end of market expectations. For the year to the end of March 2015, headline pretax profit was GBP80.1 million.
Electrocomponents said revenue growth in its UK business returned in the fourth quarter, up 4.0% year-on-year, to leave the full year flat. Europe revenue growth, in constant currencies, was 8.0% in the fourth quarter and 11% for the full year.
Card Factory, up 1.6%, reported strikingly higher profit in its recently-ended financial year, boosted by revenue growth in both card and non-card offerings.
The card and gifts retailer said pretax profit in the year ended January 31 almost doubled to GBP83.7 million from GBP42.7 million the year before, as revenue rose to GBP381.6 million from GBP353.3 million.
Like-for-like sales grew by 2.8%, which Card Factory said was driven by improvements in the quality and range of its products, new merchandising initiatives, and further market-share gains as stores mature.
The US's Intercontinental Exchange has secured funding from a trio of banks in preparation for a GBP10 billion takeover bid for London Stock Exchange Group, Sky News reported.
ICE reached agreement with Morgan Stanley, Wells Fargo and Japan's Mitsubishi UFJ to provide part of the debt needed for an offer, the report said.
Citing insiders, the report said other lenders are expected to be added to the syndicate the coming weeks.
Atlanta-based ICE, which is the owner of the New York Stock Exchange, said in early March it was considering an offer for LSE, which agreed the terms of a GBP21 billion merger with German peer Deutsche Boerse AG later that month. The LSE's traded down 0.7% at 2,771.00 pence Tuesday morning, giving it a market cap of GBP9.66 billion
Still ahead in the economic calendar, Markit services purchasing managers' indices will be in focus for the day. Italy is at 0845 BST, France at 0850 BST, Germany at 0855 BST, the eurozone at 0900 BST, the UK at 0930 BST and the US at 1445 BST.
Also in the calendar are eurozone retail sales at 1000 BST. In the afternoon, US trade balances are at 1330 BST, the Redbook index is at 1355 BST, and JOLTS job openings and the ISM non-manufacturing PMI are both at 1500 BST.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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Tullow Oil (TLW)
Anglo American (AAL)
Card Factory (CARD)