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LONDON (Alliance News) - The FTSE 100 hit a 15-month low Monday, but recovered to end the day slightly higher, diverging from indices containing stocks with smaller market capitalisation.

The blue-chip index plunged at the open, taking a lead from overnight falls in key Asian indexes as investors continued to worry about the health of the global economy, particularly that of the eurozone, and the spread of Ebola. However, it gradually recovered during the day, along with the major indexes in France and Germany.

The FTSE 100 ended up 0.4% at 6,366.24, outperforming the mid- and small-cap indexes as investors continued to shun assets deemed to be more risky. The FTSE 250 also regained some ground after hitting its lowest level since July 2013, but didn't manage to claw back all the losses and ended the session down 0.7% at 14,543.98. London's junior market, AIM, suffered the worst losses, with the AIM All-Share index ending down 1.7% at 697.31.

A similar pattern in Europe saw the major markets recover early losses to close slightly higher, with the German DAX up 0.2%, and the French CAC 40 just fractionally higher.

In the US, where the treasury markets and government are shut for Columbus Day, the equity markets were lower when Europe's equity markets closed, with the DJIA down 0.1%, the S&P 500 down 0.3%, and the Nasdaq Composite down 0.4%.

Last week, the International Monetary Fund warned that the eurozone is at significant risk of falling back into recession, and over the weekend ratings agency Standard & Poor's added to the negativity surrounding the single currency area by downgrading France's credit outlook to Negative from Stable.

France faced increasing pressure to live up to its European economic commitments, as the country prepared to submit its draft 2015 budget to Brussels.

"The figures we're hearing from Paris are not very helpful ... There are certainly concerns there," Dutch Finance Minister Jeroen Dijsselbloem said Monday, before chairing a meeting of eurozone finance ministers in Luxembourg.

"The same rules apply to everyone and France has a very special responsibility here," Austrian Finance Minister Hans Joerg Schelling said as he arrived for the talks.

Fears over the spread of the Ebola virus were also kept at the forefront of investors minds, after a US healthcare worker in Texas was confirmed Sunday to have caught Ebola, becoming the second person outside of Africa to have contracted the potentially deadly disease.

Travel-related stocks were further hit by the Ebola concerns, with holiday operator TUI Travel shedding another 2.4%, and cruise ship operator Carnival also ending 2.4% lower. TUI Travel has lost almost 16% of its value over the past five trading sessions.

The mining stocks provided the main support to the UK's leading index, on the back of rising precious metal prices and some strong Chinese trade data. The FTSE 350 Mining Sector Index gained 3.4%, with Anglo American up 3.8%, Randgold Resources up 4.4%, Rio Tinto up 2.9%, and Fresnillo up 3.9%.

Gold reached its highest level in almost four weeks at USD1,237.80 an ounce, almost 5% higher than the yearly low of USD1,182.79 it hit just one week ago, as safe haven demand continued to benefit the yellow metal.

China's exports surged by 15.3% year-on-year in September, exceeding forecasts and marking the fastest growth in 19 months, the government said Monday. Export value reached USD214 billion in September, while imports grew 7% year-on-year to USD183 billion, the General Administration of Customs reported.

Tesco was the one of the worst performing FTSE 100-listed stock Monday, falling 1.7% after the troubled supermarket was brought back into focus by reports that two more of its directors are leaving. Jonathan Lloyd, company secretary at Tesco, will leave the retailer next March after serving his notice period, and Ken Hanna, audit committee chairman and non-executive director, is also expected to stand down when his six-year tenure comes to an end later this year, the Financial Times reported, adding that neither departure is linked to the recent discovery of the overstatement in profits.

FTSE 250-listed Synergy Health surged 31% after it recommended a USD1.9 billion takeover offer to its shareholders. US-based Steris Corp offered GBP19.50 a share for the UK company, comprising 439 pence a share in cash and 1,511p a share in Steris shares. The offer represents a 39% premium to Synergy's closing price on Friday of 1,400 pence. Synergy also said its revenue in the six months to September 28 was GBP197.6 million, up from GBP192.1 million in the equivalent period a year earlier, although underlying revenue, which excludes currency movements, was up 7.4%, thanks to a particularly strong performance by its Applied Sterilisation Technologies business.

Bank note printer De La Rue gained 3.7% after the Bank of England confirmed that it has chosen the company to provide it with its notes for the next ten years

Packaging components company Essentra was the worst FTSE 250 performer, falling 5.9% despite the company saying its revenue was up 8% on the year at constant currencies in the third quarter, as higher sales of components and protection products and filter products offset a decline in sales of its porous technologies, meaning its on track to hit the targets set out in its strategic plan three years ago.

While Monday has been very light on economic data, the calendar gets more interesting as the week goes on, with September inflation numbers from the UK and the eurozone providing the morning focus, as well as Eurozone and industrial production data and the German ZEW economic survey.

From the UK corporate calendar, full-year results are scheduled from housebuilder Bellway, while interim results are due from online clothing retailer Boohoo.com as well as floorings company Carpetright. SABMiller and Burberry Group will put out trading statements.

The US third quarter earnings season is also under-way and on Tuesday investors will be awaiting the first of the banking sector results from JP Morgan, Wells Fargo, and Citigroup, as well as consumer goods and pharmaceutical bellwether Johnson & Johnson.

By Jon Darby; jondarby@alliancenews.com; @jondarby100

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