LONDON MARKET OPEN: Stocks Down Amid Broker Changes, With Focus On Oil

Mon, 26th Sep 2016 07:37

LONDON (Alliance News) - Stocks in London were lower on Monday morning, giving back some of the US Fed-inspired gains seen last week, with broker rating changes behind some early stock moves and as oil traders keep an eye on the start of the International Energy Forum.

The FTSE 100 stock index was down 1.0%, or 67.82 points, at 6,841.61. The FTSE 250 was 1.2% lower at 17,702.13 and the AIM All-Share was down 0.1% at 815.59.

In mainland Europe, the CAC 40 index in Paris was down 1.0% and the DAX 30 in Frankfurt was 0.9% lower.

In Asia, the Japanese Nikkei 225 index in Tokyo closed down 1.3%. In China, the Shanghai Composite ended 1.8% lower, while the Hang Seng index in Hong Kong continues down 1.3%.

Ahead in the economic calendar Monday, Germany's IFO business climate survey is at 0900 BST. The UK's BBA mortgage approvals are at 0930 BST. In the US, the Dallas Fed manufacturing business index is at 1530 BST.

The International Energy Forum will take place in the Algerian capital of Algiers from Monday to Wednesday, at which OPEC members are expected to meet on the sidelines amid continued rumours of a cut in oil production.

"Brent crude is enjoying a slight rise in price this morning on the back of positive comments from the Algerian oil minister regarding a possible production freeze at this week's informal OPEC meeting," said Accendo Markets market analysts Michael van Dulken and Henry Croft.

However, the analysts highlighted the volatility seen in crude prices since Friday. The North Sea benchmark touched a high of USD48.23 a barrel on Friday, but rapidly gave back the gains, quoted at USD46.07 a barrel after the London equities open on Monday.

Crude prices rose early on Friday amid market chatter suggesting that Saudi Arabia might be open to a deal on an output cut to boost oil prices, but only if Iran capped its own production. However prices gave back that gain shortly afterwards after reports denied that Saudi Arabia was open to such an agreement.

"Build-up to this week's meeting could once again see varying statements of intent from the oil ministries involved, increasing price volatility rather than sustaining price increases," noted Dulken and Croft.

Shares in oil producers were lower, with BP down 1.3% and Royal Dutch Shell 'A' shares down 1.2%.

Informa was among a handful of gainers in the FTSE 100, after Peel Hunt upgraded the events manager and business publisher to Add from Hold, according to traders.

At the other end of the blue-chip index was InterContinental Hotels Group, down 3.4%, after Morgan Stanley cut the hotel operator to Underweight from Equal Weight, according to traders.

Kingfisher was down 2.0% after UBS cut the DIY retailer to Neutral from Buy. Meanwhile, lender Lloyds Banking Group was down 1.9% after Goldman Sachs cut its recommendation to Sell from Neutral.

In the FTSE 250, Sports Direct International was down 2.8%, giving back some of the gains seen on Friday. The sports goods retailer had risen 4.0% after the announcement that Chief Executive Dave Forsey had resigned with immediate effect and was replaced by the company's founder, majority shareholder and former executive deputy chairman, Mike Ashley.

N Brown was 2.6% lower after HSBC cut the online and catalogue fashion retailer to Hold from Buy.

In Main Market, MJ Gleeson was up 3.0%. The urban regeneration and strategic land specialist lifted its full-year dividend by 45% and noted demand remained strong following a year in which both revenue and profit rose.

MJ Gleeson said its pretax profit for the year ended June 30 was GBP28.3 million, 63% ahead of the GBP17.3 million reported a year earlier, thanks to a 21% rise in revenue to GBP142.1 million from GBP117.6 million. It said its two divisions, Gleeson Homes and Gleeson Strategic Land, had strong performances over the year.

The company said it will pay a final dividend of 10.00 pence per share, resulting in a total dividend of 14.50p per share. This represents a 45% rise from the 10.00p per share paid a year earlier.

By Daniel Ruiz; danielruiz@alliancenews.com