AFR.L Share News (AFR)

LONDON (Alliance News) - UK shares ended mostly higher Monday, shrugging off another decline in oil prices in a quiet start to a week heavy in economic events.

The week ahead is expected to be driven mainly by central bank news, with European Central Bank President Mario Draghi speaking later Monday in Frankfurt, the Bank of Japan's monetary policy decision due on Tuesday, and the minutes of the Bank of England's most recent monetary policy committee meeting due on Wednesday. However, the markets are mainly focused on the conclusion of the US Federal Open Market Committee meeting, also on Wednesday.

Chancellor of the Exchequer George Osborne presents the UK government budget on Wednesday as well.

The FTSE 100 closed up 0.9% Monday at 6,804.08, and the FTSE 250 closed up 0.5% at 17,200.95. The AIM All-Share underperformed, ending down 0.3% at 715.87.

European stocks also fared well Monday, with the French CAC 40 ending up 1.1% and the German DAX 30 gaining 2.2% to a new record high close of 12,162.94, the index's first close above 12,000 points.

At the close of the London Stock Exchange, Wall Street also was trading higher. The DJIA and S&P 500 were both up 1.0%, and the Nasdaq Composite was up 0.8%.

Oil prices slipped further Monday, with US benchmark West Texas Intermediate falling to a fresh six-year low amid rising stocks and hopes for a nuclear deal with Iran. WTI fell to a low of USD42.83 a barrel, its lowest since March 2009, while Brent oil declined to a low of USD52.64 a barrel, its lowest since the beginning of February.

As a result, energy-related stocks were amongst the worst performers in the FTSE 100, with Tullow Oil the biggest decliner, falling 6.0%. Weir Group lost 0.4% and BP 0.2%. In the FTSE 250, Premier Oil, down 7.5%, Nostrum Oil & Gas, down 6.1%, and Hunting, down 3.8%, were amongst the index's biggest fallers.

Share of CRH were hit after Swiss cement giant Holcim said its board has concluded that it can no longer pursue a merger with French rival Lafarge on the current terms of the proposed mega-deal, and it wants talks about changing the exchange ratio and "governance issues", throwing the deal into doubt.

CRH has a separate deal to buy assets that the two companies are selling in order to get the merger past antitrust regulators. The London-listed Irish building materials company said it would press ahead with a shareholder meeting on Thursday to approve the asset purchase deal. CRH closed as the second worst performer in the FTSE 100, down 4.4%.

Miner Anglo American also could be affected by an unravelling of the Hocim-Lafarge merger, as it had a deal to sell its stake in its UK joint venture with Lafarge back to the French company, which would then sell it on to CRH as part of its anti-trust remedy. Anglo shares ended up 0.1%.

Struggling oil company Afren closed as the worst performer in the FTSE 250, down 20% after JP Morgan slashed its price target on the stock to 4.0 pence from 33.0p, reiterating its Underweight recommendation. Afren, which is due to be relegated from the FTSE 250 next Monday, closed the day at 3.74p.

Meanwhile, Beazeley was one of the best performers in the FTSE 250, up 3.2% at 295.10p. Deutsche Bank initiated Beazley with a Buy rating and 306.00 pence price target, saying the specialty insurer stands to benefit from the prospect of an interest rate increase in the US, due to the bulk of the insurer's fixed-income holdings being in dollars.

In the corporate calendar Tuesday, FTSE 100 miner Antofagasta reports full-year results, as will FTSE 250-listed online takeaway company Just Eat. Grocer J Sainsbury issues a fourth-quarter trading statement, while financial spread betting firm IG Group releases a third quarter trading statement.

In the economic calendar ECB President Draghi makes his speech in Frankfurt at 1845 GMT Monday. On Tuesday, the Bank of Japan issues its monetary policy decision, eurozone consumer price index is due at 1000 GMT, as are ZEW survey results for both the eurozone and Germany.

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

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