UK MORNING BRIEFING: Tesco Leads London Declines After Another Shock

LONDON (Alliance News) - UK shares have opened lower Monday, giving up some of the post-Scottish referendum relief rally, on weak leads from Wall Street and Asia.

London investors also received another nasty surprise from Tesco prior to the open Monday, the supermarket chain issuing a statement saying it had overstated its first half pretax profit guidance by GBP250 million. Tesco shares are down 8.3%, the worst FTSE 100 performer. Shore Capital immediately put its Hold rating on Tesco shares Under Review.

Meanwhile, Goldman Sachs has lifted GlaxoSmithKline to Buy from Neutral. The drug stock is up 0.9%, the second biggest blue-chip riser.

Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: down 0.6% at 6,798.22
FTSE 250: down 0.7% at 15,753.82
AIM ALL-SHARE: down 0.1% at 761.87
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Hang Seng: down 1.3% at 23,987.70
Nikkei 225: closed down 0.7% at 16,205.90
DJIA: closed up 0.1% at 17,279.74
S&P 500: closed down 0.1% at 2,010.40
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GBP-USD: up at USD1.6346
EUR-USD: up at USD1.2860

GOLD: down at USD1,214.07per ounce
OIL (Brent): down at USD97.89 a barrel

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

09:00 Italy Industrial Orders and Sales
14:00 EU ECB President Draghi's Speech
15:00 EU Consumer Confidence Preliminary
15:00 US Existing Home Sales
15:05 US Fed's William Dudley speech
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The Ukrainian government said Sunday it would withdraw heavy weapons from the conflict zone in the country's east only after the pro-Russian separatists adhere to the ceasefire. Security Council spokesman Andriy Lysenko said in Kiev that the government will implement a fresh agreement with the separatists step by step, beginning with the ceasefire. "So far the first step is not fulfilled we are not talking about the others," Lysenko was quoted as saying by the Interfax Ukraine news agency. He said any withdrawals would be carried out only if separatist militias withdraw simultaneously.
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China's macro policy will continue to focus on growth objectives, especially on employment and inflation, Finance Minister Lou Jiwei said Sunday. Any weakness in single economic indicator will not change the government's economic policies, he said. Data released last week showed that industrial output growth slowed to 6.9% in August raising expectations of additional stimulus. Lou said tax cuts for small and micro firms and bringing social capital to more sectors will help to generate growth.
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When US President Barack Obama chairs a UN Security Council meeting on Wednesday, he will ask the 15-member committee to vote on a US-drafted resolution that compels 193 UN member states to prevent their citizens from joining terrorist groups. The resolution is part of the US strategy to expand the international effort against the Islamic State in Iraq and Syria, as Washington expands airstrikes and seeks partners for a broader military effort.
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Palestinian and Israeli delegations will resume negotiations Tuesday in Cairo on a long-term truce for the Gaza Strip, a senior Israeli government official said. A 50-day conflict ended in late August with a temporary ceasefire deal, and with both sides agreeing to start talks on a long-term arrangement within one month. Egypt had invited delegations to meet on Wednesday. At Israel's request, the talks were brought forward by a day because the Jewish New Year starts on Wednesday after sunset.
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Afghanistan's election commission on Sunday named former finance minister Ashraf Ghani Ahmadzai the next president after he and his rival signed a power-sharing agreement to end a nearly six-month dispute over electoral fraud. The agreement will see Ghani's challenger, former foreign minister Abdullah Abdullah, become chief executive officer in a new national unity government. The position is a new one, similar to a prime minister responsible for the council of ministers and day-to-day affairs. The pact, hammered out Saturday night with help from US and UN officials after more than two months of talks, gives Abdullah and his allies significant powers, including a substantial number of seats in the cabinet and other positions in the government and judiciary. Ghani, as president, will be head of the state and the government.
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Crowds of people gathered around the globe Sunday to demand action against climate change ahead of a special UN summit, calling on world leaders to cease political posturing and commit to a concrete international plan. Many of the demonstrations took inspiration from the flagship event in New York City, where the summit is slated to take place. Protests there were billed as the "largest climate march in history" and initiated by a broad worldwide coalition of activists.
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BROKER RATING CHANGES
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Shore Capital Puts Tesco Under Review, From Hold
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GOLDMAN RAISES GLAXOSMITHKLINE TO 'BUY' ('NEUTRAL') - PRICE TARGET 1670 (1700) PENCE
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GOLDMAN CUTS PENNON GROUP TO 'SELL' ('NEUTRAL') - TARGET 740 (743) PENCE
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COMPANIES - FTSE 100
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Britain's biggest supermarket chain Tesco took the market by surprise by issuing a statement saying it had overstated its first half pretax profit guidance by GBP250 million. In its first public announcement under new Chief Executive Dave Lewis, the grocer said the profit guidance overstatement for the six months to August 23, was due to the "accelerated recognition of commercial income and delayed accrual of costs". Last month, Tesco said trading profit for the first half ending August 23 would be about GBP1.1 billion.
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Media buying giant WPP said it has agreed to invest USD25 million, plus its ad server platform technology, for a significant stake in advertising technology company AppNexus Inc.
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British Land Co said it has exchanged on the sale of 18 apartments at its new London residential development, Clarges Mayfair, generating proceeds of GBP210 million. The London-based property investment company said the sales come after a number of apartments were released in a pre-launch to targeted potential buyers over the summer. The sale price reflects an average capital value of GBP4,750 per square foot and sets "new records for prices in Mayfair," said British Land.
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Dixons Carphone and EE were closing in on deals over the weekend to buy parts of collapsed mobile phone retailer Phones 4U, the Financial Times reported Sunday. Dixons Carphone was understood to be in talks to buy some Phones 4U stores, meaning more than 200 of the company's outlets would be kept open in the UK, in addition to the 160 Phones 4U concessions which had operated within Dixons stores, the FT said. The news comes after Vodafone Group PLC on Friday said it would buy 140 stores from Phones 4U administrator PwC, retaining 900 workers from the chain. Phones 4U had a total of 550 standalone stores.
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COMPANIES - FTSE 250
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Laird said Chief Financial Officer Jonathan Silver will be stepping down from the role at next years' annual general meeting after nearly 29 years with the company. Silver will leave the company upon conclusion of Laird's AGM on May 8, 2015. The company said he will work closely with Chief Executive David Lockwood on the appointment of a successor to ensure a smooth transition.
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Redefine International said it has acquired the Doubletree by Hilton Hotel in Edinburgh for GBP25.3 million, reflecting a net yield of approximately 6.9%. The income-focused UK real estate investment trust said the hotel will be let to Redefine Hotel Management Ltd, a wholly-owned subsidiary of Redefine BDL Hotel Group Ltd, in which Redefine International has a 25.28% stake.
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COMPANIES - LONDON MAIN MARKET AND AIM
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London Mining said it is in dispute with Glencore over a cash prepayment it claims the FTSE 100-listed group has refused to pay and said it was considering its options on the offtake agreement it has with Glencore, including potentially terminating the deal.
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COMPANIES - INTERNATIONAL
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German engineering company Siemens will buy US oil equipment maker Dresser-Rand Group for USD7.6 billion, The Wall Street Journal reported Monday. Siemens will pay USD83 a share for the acquisition, the report said.
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Data-storage giant EMC Corp is weighing options, including a merger, the Wall Street Journal reported, citing people familiar with the matter. The company is under pressure from activist shareholder Elliott Management Corp., which wants the firm to break up to boost stock value. Additionally, EMC's long-time chief executive Joe Tucci is expected to retire early next year, and the company has not yet announced a successor.
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German engineering and electronics company Robert Bosch GmbH agreed Sunday to buy out German conglomerate Siemens AG's 50% stake in their household appliances joint venture BSH Bosch und Siemens Hausgeräte GmbH in a deal valued at about EUR3 billion. Further, Siemens and Bosch will also each receive an additional distribution of EUR250 million from BSH before the transaction is completed.
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Monday's Scheduled AGMs/EGMs

Amiad Water Systems
Provexis
DQ Entertainment
Tungsten Corporation
Braveheart Investment Group
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite

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