LONDON MARKET OPEN: Stocks Down; Glencore Rises On Copper Mine Sale

LONDON (Alliance News) - UK stocks have opened a touch lower Monday, with Glencore shares higher after it said it has begun the process for the sale of its Australian and Chilean copper mines.

The Anglo-Swiss commodities trader and miner said it has begun a process to sell its wholly-owned Cobar copper mine in Australia and Lomas Bayas copper mine in Chile.

The company said the sale process is in response to receiving a number of "unsolicited expressions of interest for these mines from various potential buyers".

The process may or may not result in a sale, Glencore noted, and it said it will issue an update only in the event that a sale is agreed or a disclosure "is otherwise required".

Earlier Monday, Glencore's ordinary shares in Hong Kong had been halted pending the asset sale announcement. In London, the stock traded up 0.7%.

Rio Tinto said it won't cut copper production, according to a Financial Times report on Monday. The FTSE 100 miner said it would not be logical to hold back output and leave space in the market for rivals with higher costs, the report said. The miner's shares were up 0.4%.

The FTSE 100 traded down 0.4% at 6,392.03, following a strong week of gains. The FTSE 250 index was down 0.1% at 17,067.21 while the AIM All-Share was up 0.1% at 7337.11.

In Europe, the French CAC 40 in Paris was down 0.4% and the German DAX 30 was up 0.2%.

Asian stocks were higher, with the Hang Seng index in Hong Kong up 0.7% and the Shanghai Composite up 3.3%.

International Consolidated Airlines Group was up 1.5% at 570.83 pence after Goldman Sachs resumed coverage on the British Airways owner at Buy with a price target of 755.00 pence. Standard Conversely, Chartered traded down 2.6% after Investec downgraded the emerging markets bank to Hold from Buy.

In the FTSE 250, Carillion was the top gainer, up 5.5% after it reiterated confidence in achieving its targets for 2015 and ending the year with strong revenue visibility for 2016, as it said it has secured business worth around GBP1.7 billion since the end of its first half.

The construction and support services company said it has signed contracts, secured preferred bidder positions and been awarded frameworks worth around GBP1.7 billion since the end of June.

Carillion said that it and its joint ventures were selected by Network Rail for a number of frameworks and early contractor involvement contracts that it expected to generate over GBP400 million in revenue.

Bank of Georgia Holdings is set to spin off its healthcare subsidiary in a float on the London Stock Exchange, according to statements on Monday.

Georgia Healthcare Group intends to raise USD100 million when it floats on the exchange, while Bank of Georgia Holdings wants to sell an unspecified number of existing shares through its intermediate holding company.

A further 10% of the total number of shares being sold under the offering will be made available to shareholders by Bank of Georgia Holdings in the form of an over-allotment option. Shares in the company were up 3.3%.

In a thin economic calendar, the UK Conference Board leading economic indicators index is at 1430 BST. While there are no economic data releases from the US due to Columbus Day celebrations, the focus will be on speeches from US Federal Reserve members with Atlanta President Dennis Lockhart speaking at 1310 BST and Chicago President Charles Evans at 1530 BST.

However, analysts at Commerzbank believe that communication from the Fed is not sparking a reaction from the market.

"The [Federal Open Market Committee] members themselves are to blame for the fact that their comments are without effect. Many market participants are simply too disappointed that the rate step did not take place in September even though the environment for a rate step seemed almost ideal at the time," Commerzbank said.

"So who will still believe the Fed's affirmations that the key rate would now definitely be hiked in December? In particular as there will always be some reason to postpone the step again, at the moment this might be the low market based inflation expectations which the Fed seems to be increasingly interested in these days having ignored them contemptuously so far," the German investment bank added.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

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