UK MORNING BRIEFING: ASOS Down On Outlook, Pearson Up On Upgrade

LONDON (Alliance News) - Shares have opened lower in London Tuesday ahead of UK inflation data at 0930 BST.

The small-cap AIM All-Share index is underperforming, with leading share ASOS down 14% at 2,090.00 pence. ASOS said its recently completed financial year will be in line with market expectations, but its new year just started will be only flat on the year before.

In the FTSE 100, Pearson leads gainers, up 1.7% after being raised to Overweight from Equal-Weight by Morgan Stanley, according to traders.

Meanwhile, Citigroup has raised FTSE 250 pub chain Marston's straight to Buy from Sell, with a 180 pence price target. Marston's is up 0.6% at 147.70p at the open Tuesday.

Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: down 0.1% at 6,794.78
FTSE 250: down 0.2% at 15,611.91
AIM ALL-SHARE: down 0.6% at 768.44
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Hang Seng: down 0.5% at 24,230.46
Nikkei 225: closed down 0.2% at 15,911.53
DJIA: closed up 0.3% at 17,031.14
S&P 500: closed down 0.1% at 1,984.13
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GBP-USD: down at USD1.6188
EUR-USD: down at USD1.2932

GOLD: up at USD1,236.01 per ounce
OIL (Brent): down at USD97.57 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
(all times British Summer Time)

09:30 UK Consumer, Retail and Producer Price indices
09:30 UK DCLG House Price Index
10:00 EU Labour cost
10:00 Germany ZEW Survey of Economic Sentiment
10:00 EU ZEW Survey of Economic Sentiment
13:30 US Producer Price Index
13:55 US Redbook index
14:00 US Net TIC Flows
17:45 Canada BoC Governor Poloz Speech
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Scottish independence would not be a "trial separation" but a "painful divorce", British Prime Minister David Cameron warned Monday, three days before Scots vote on whether to end 300 years of union with the rest of the UK. "This is a decision that could break up our family of nations, and rip Scotland from the rest of the UK," he said in Aberdeen. A "poll of polls" - a collation of the six-most recent surveys by John Curtice, politics professor at Strathclyde University - suggested that 51% of Scots were against independence while 49% were in favour.
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US military forces have conducted airstrikes against an Islamic State target near Baghdad for the first time as part of an expanded effort to combat the jihadist militants, the US Central Command said. Attack aircraft were used in a strike Monday in support of Iraqi government troops south-west of Baghdad. The airstrike was described as the first in "expanded efforts beyond protecting our own people and humanitarian missions to hit (Islamic State) targets as Iraqi forces go on offense, as outlined in the president's speech" last week, the military said. The statement said the strike had destroyed an Islamic State fighting position that was firing on Iraqi soldiers outside Baghdad.
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The Organization of Security and Co-operation in Europe (OSCE) said Monday that its observers in eastern Ukraine had come under artillery fire. Nobody was hurt in the late Sunday incident east of the city of Donetsk, said Ertugrul Apakan, head of the organization's monitoring mission in Ukraine. Pro-Russian separatists and the Ukrainian government have accused each other of violating the fragile, OSCE-brokered truce. Ukraine's National Security Council said that separatist militias opened fire on government positions Monday in 14 locations. The separatist's self-declared Donetsk People's Republic, which controls parts of the Donetsk region, claimed that 20 people were killed in fighting and accused government troops of firing more than 40 times on its positions.
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Foreign direct investment in China declined notably in August, figures from the Ministry of Commerce showed. Investment inflows decreased 14% from last year to USD7.2 billion. The decline was followed by an another 17% fall in July. During January to August, inbound investment slid 1.8% from last year to USD78.3 billion. Meanwhile, outbound investment increased 15% to USD65.2 billion.
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The US will send thousands of troops to respond to the Ebola outbreak in West Africa by building clinics and training hundreds of healthcare workers, US President Barack Obama is to announce Tuesday. Obama called the outbreak a national security threat and planned to travel to the Centers for Disease Control and Prevention in Atlanta to meet with experts working to combat the disease.
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BROKER RATING CHANGES
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DEUTSCHE BANK RAISES ANTOFAGASTA TO 'HOLD' ('SELL') - TARGET 820 (730) PENCE
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DEUTSCHE BANK RAISES ANGLO AMERICAN TO 'BUY' ('HOLD') - TARGET 2100 PENCE
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BERENBERG REINITIATES RECKITT BENCKISER WITH 'HOLD' - PRICE TARGET 5500 PENCE
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TRADERS: MORGAN STANLEY RAISES PEARSON TO 'OVERWEIGHT' ('EQUAL-WEIGHT')
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CITIGROUP RAISES RESTAURANT GROUP TO 'BUY' ('NEUTRAL') - TARGET 740 (661) PENCE
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CITIGROUP RAISES MARSTON'S TO 'BUY' ('SELL') - TARGET 180 (125) PENCE
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CITIGROUP RAISES LADBROKES TO 'NEUTRAL' ('SELL') - TARGET 125 (90) PENCE
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CITIGROUP CUTS BWIN.PARTY TO 'SELL' ('NEUTRAL') - TARGET 80 (84) PENCE
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TRADERS: CITIGROUP CUTS ENTERPRISE INNS TO 'SELL' ('NEUTRAL')
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TRADERS: LIBERUM INITIATES SPIRENT WITH 'HOLD' - TARGET 100 PENCE
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COMPANIES - FTSE 100
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AstraZeneca said it has agreed with Eli Lilly and Co Ltd to jointly develop and commercialise its compound AZD3293 as a potential treatment for Alzheimer's disease. Under the deal Lilly will pay AstraZeneca up to USD500 million in development and milestone payments. AstraZeneca expects to receive the first milestone payment of USD50 million in the first half of 2015. The two will share costs equally for the development and commercialisation of the drug.
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HSBC Holdings said it intends to issue EUR1.5 billion in perpetual subordinated contingent convertible securities on September 17. The terms and conditions of the deal will be in line with those issued under the bank's USD50 billion programme for the issue of the securities, known as CoCos. HSBC's CoCo issuance programme started last week when the bank came to market with two additional Tier One bonds worth a collective EUR4.4 billion, with one denominated in euros and one in dollars.
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Vodafone Group and EE were involved in talks about a joint takeover of Phones4U as recently as two months ago, but abandoned the deal without providing an explanation, Sky News reported on Monday. Executives at Vodafone discussed the deal at a meeting in June with financial and legal advisers to Phones4U, the mobile phone retail chain which collapsed into administration this week, Sky News said.
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US-based energy firm ConocoPhillips has hired banks to sell its 24% stake in the Clair oilfield, the UK's largest oilfield, the Financial Times reported quoting people familiar with the matter. The stake is said to fetch between USD2 billion and USD3 billion. BP has a 28.6% stake in the field, Royal Dutch Shell a 28% holding and Chevron Corp has a 19% stake. The moves comes as the future of North Sea oil is being debated ahead of the Scottish independence referendum later this week. The project is located in Scottish territorial waters west of the Shetland islands.
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COMPANIES - FTSE 250
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Galliford Try, which bolstered its construction arm earlier this year, reported an increase in profit and revenue for the full year, following a strong performance from its housebuilding and partnerships divisions. The company also announced that Chief Executive Greg Fitzgerald, who has been with the company for 33 years, has decided to retire no later than the end of 2015. The company has started the process to appoint his successor. Galliford Try, which acquired Miller Construction from Miller Group Holdings Ltd for GBP16.6 million in July, posted pretax profit of GBP95.2 million for the year to June 30, up from GBP71.7 million a year earlier, as revenue rose 21% to GBP1.77 billion from GBP1.47 billion.
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Ophir Energy said it has found a new gas discovery at the Silenus East-1 well in Block R in Equatorial Guinea, saying the new find allows it to upgrade the Block R floating liquefied natural gas project. The initial drill at the well encountered a 67 metre gross gas column with high-quality reservoir in line with the pre-drill expectations, FTSE 250-listed Ophir said. The well was then deepened in order to test a secondary high risk oil target and the drilling encountered high-quality, albeit water-wet, reservoirs with weak oil shows. Ophir said the play remains of interest to the company, and it will conduct further evaluations on the block.
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Petra Diamonds said it has sold a 122.52 carat blue diamond recovered in June for a value equivalent to USD27.6 million to a partnership comprising of the company and its polishing partner. The FTSE 250-listed company said that the diamond has been sold to a beneficiation partnership comprising of Petra, holding 15%, and its polishing partner - which wishes to remain unnamed - holding 85%.
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N Brown H1 Group Revenue Down 0.6%, Down 0.5% Like-For-Like; Says Marketing Investment In Catalogues Was Reduced 24% In H1;Says Spend Moved To Customer Recruitment And Re-Phased To H2
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Thomas Cook Expects FY14 Operational Performance Improved On FY2013; FY14 Underlying EBIT To Be Between GBP315M-GBP335M; Q4 FY14 All Businesses To Beat Previous Year
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Crest Nicholson: Total Forward Sales At Sept 5 Up 11% On Year Earlier; Rates Of Sale Remain Significantly Above Historic Norms
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COMPANIES - LONDON MAIN MARKET AND AIM
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Online fashion retailer ASOS said its sales growth slowed in the final quarter of its financial year, as the fire that broke out at its warehouse in Barnsley in June wiped GBP25 million to GBP30 million off sales in the quarter, but it said it expects pretax profit for the recent year to be in line with market expectations. In the UK, retail sales growth slowed to 33% in the three months to August 31, while international sales rose only 6%. International retail sales accounted for 59% of total sales, down from 64% last year. "In the new financial year we'll make significant investments in our international pricing and proposition, as well as in our logistical infrastructure and technology platform. As a result, we expect profit before tax for the year to 31 August 2015 to be at a similar level to 2013/14," said Robertson.
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Porta Communications said it swung to a pretax profit and revenue almost doubled in the first-half as the company benefited from acquisitions and growing maturity across its divisions. In its interim results for the first-half to June 30 the AIM-listed international marketing and communications business said it swung to a pretax profit of GBP71,000, compared to a GBP1.6 million loss during the same period last year and from a GBP3.0 million loss in the full-year. Revenue almost doubled during the period, coming in at GBP16.1 million, compared to GBP8.5 million in the first-half of 2013; the company reported revenue of GBP24.4 million for the full-year 2013.
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Thor Mining: Deal To Acquire Pilot Mountain Tungsten Project In Nevada
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COMPANIES - INTERNATIONAL
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Chinese e-commerce giant Alibaba increased the top of its share-price range to USD68, up from USD66, ahead of what is expected to be the largest US stock launch ever, the company told regulators Monday. At that price the company could increase capital to be raised from USD24.3 billion to USD25 billion in its debut on the US stock market, according to the filing with the US Securities and Exchange Commission.
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Software giant Microsoft is acquiring the maker of the game Minecraft, both companies said Monday.
Microsoft is buying Swedish-based video game developer Mojang AB for USD2.5 billion in a deal slated to close at the end of the year, according to the statement.
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Pre-orders for the new bigger and slimmer iPhone 6 and iPhone 6 Plus have exceeded 4 million in the first 24 hours, the Cupertino, California-based company announced Monday. Delivery to customers will start Friday, but the record number of orders "exceeded the pre-order supply," so many customers will have to wait until October to receive their new phones, the statement said.
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French telecom major Orange SA, previously known as France Telecom, said Monday it will launch a friendly voluntary tender offer to acquire Spanish broadband provider Jazztel PLC for EUR13 per share, or about EUR3.4 billion, in cash. The proposed deal will create the second largest fixed-line broadband operator and one of the major players in the mobile segment in Spain that will enable the combined entity to provide convergent offers to its customers. The offer price represents a 34% premium over Jazztel's average closing price in the last 30 trading days.
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Mexican telecom giant America Movil SAB De CV is preparing to sell assets in Mexico worth up to USD17.5 billion and has contacted potential suitors including AT&T Inc and Japan's Softbank Corp on the sale, Bloomberg reported Monday, citing people with knowledge of the matter. America Movil is controlled by billionaire Carlos Slim.
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German pilots union Cockpit has called off a strike scheduled for Tuesday due to advances in negotiations with Lufthansa, the union said late Monday.
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Tuesday's Scheduled AGMs/EGMs

Daisy Group
NCC Group
HML Holdings
Tricorn Group
Cohort
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite

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