LONDON (Alliance News) - Stocks in London opened mixed on Wednesday amid lingering worries on global growth, while cafe chain
Patisserie Holdings requested its shares be suspended from trading amid a probe into "accounting irregularities". The International Monetary Fund on Tuesday cut global economic growth forecasts for 2018 and 2019, saying the US and China would feel the brunt of the impact of their trade war next year. Meanwhile, China stepped up its war of words with the US, saying it had not initiated the trade war but only responded in self-defence.The FTSE 100 index was down 0.1%, or 9.71 points, at 7,227.88. The mid-cap FTSE 250 index was flat at 19,553.60. The AIM All-Share index was down 0.2% at 1,026.45.The Cboe UK 100 was down 0.1% at 12,272.32, the Cboe UK 250 was flat at 17,725.06, and the Cboe UK Small Companies was flat at 11,872.14.In mainland Europe, the CAC 40 in Paris was down 0.2% while the DAX 30 in Frankfurt was down 0.1%.On the London Stock Exchange,
HSBC Holdings was up 0.5% after the lender entered into a USD765 million settlement in the US over its sale of mortgage-based securities during the run-up to the financial crisis.The deal resolves claims by the US that HSBC misled buyers about the quality of the securities, which were backed by pools of home loans. The issues, which occurred between 2005 and 2007, led to major losses by investors, prosecutors said."We are pleased to put this investigation related to activity that occurred more than a decade ago behind us," said Patrick Burke, president & chief executive officer of HSBC US. As per the terms of the settlement, HSBC North America Holdings, without admitting liability or wrongdoing, will pay to the US Department of Justice a USD765 million civil monetary penalty, of which USD492 million will be paid by HSBC USA, HSBC North America's US-based public company. "The settlement releases HSBC from potential civil claims by the DOJ related to its securitization, issuance and underwriting of RMBS during the period from 2005 through 2007, and requires no additional remedial action," HSBC said.
Sage Group was up 0.3% after Deutsche Bank raised the accounting software provider to Hold from Sell.Meanwhile, the UK Competition & Markets Authority confirmed that it has approved the proposed merger between the retail division of energy company
SSE and Npower following a review.SSE shares were down 0.4%.The decision comes after a provisional clearance from the CMA in August. The UK competition regulator said SSE Retail and Npower are not close rivals for customers on standard variable tariff prices.In the FTSE 250,
PageGroup was the best performer, up 3.3% after the recruiter reported a double-digit rise in third quarter profit, and said it expects operating profit for all of 2018 to be ahead of consensus expectations.Total gross profit for the quarter, which ended September 30, rose to GBP207.7 million from GBP177.2 million for the same period a year before, a rise of 17% at reported currency rates and 20% at constant rates.PageGroup said its operating profit for the year of 2018 will be ahead of current consensus expectations, which currently stands at GBP138.7 million."We will continue to focus on driving profitable growth as we progress towards our vision of 10,000 headcount, GBP1 billion of gross profit and GBP200 million - GBP250 million of operating profit. We are pleased with the group's continued strong performance and now expect 2018 operating profit to be marginally ahead of the consensus of current market forecasts," said Chief Executive Officer Steve Ingham.
Sequoia Economic Infrastructure Income Fund was up 2.8% at 109.00p after the fund said it increased the size of a previously announced share offer to raise GBP253 million.The company will issue 238.7 million news shares at 106.0 pence each. Of these, 125.6 million will be sold in a placing and subscription, while 113.1 million go toward an open offer.The company expects admission of the new shares to trading to take place on October 12 after which it will have 1.1 billion shares in issue. Elsewhere, shares in
Patisserie Holdings were suspended on Wednesday after the company said it discovered "significant and potentially fraudulent" accounting irregularities.The cafe chain, which owns the Patisserie Valerie brand, said the irregularities "may lead to a material change in its overall financial position" as they could imply a material mis-statement of the firm's accounts.The company, which operates from over 200 stores across the UK, requested its shares be suspended from trading on AIM in London while it conducts an investigation into its "true financial position".Meanwhile, Chief Financial Officer Chris Marsh has been suspended from his role, although the company made no accusation of wrongdoing against him at this stage.Chairman Luke Johnson, who is also the company's largest shareholder with a 70% stake, said: "We are all deeply concerned about this news and the potential impact on the business. We are determined to understand the full details of what has happened and will communicate these to investors and stakeholders as soon as possible."The economic events calendar on Wednesday has Italy industrial output figures at 0900 BST and US producer prices at 1330 BST. In addition, Andy Haldane, the Bank of England's chief economist, will speak at the Advisory, Conciliation & Arbitration Service Future of Work conference in London at 1000 BST.The pound was quoted at USD1.3170, firm compared to USD1.3141 at the London equities close Tuesday.The Office for National Statistics will release UK monthly GDP estimate for August. GDP is forecast to climb 0.2% on month, following a 0.3% rise in July.In the meantime, UK industrial and construction output are due. Economists forecast industrial production to grow 0.1% month-on-month in August, the same pace of growth as seen in July.Elsewhere, the International Monetary Fund has included Brexit among key risks to the stability of the global economy in a new report.The organisation has called for financial institutions to "step up their preparations for a post-Brexit landscape" and include measures for a no-deal Brexit "in as much detail as possible".In its two-yearly health assessment of the global financial system, the IMF said that "growing anxiety" about a breakdown in negotiations between Britain and the EU could lead to uncertainty in the UK and elsewhere.Should such pressures hit one of the world's largest economies it could trigger a "sharp tightening of global financial conditions", the report says.The IMF's assessment comes after the Bank of England warned that an estimated GBP41 trillion of derivatives face legal uncertainty after Brexit on March 29, unless the EU takes action to ensure continuity of existing rules.The Japanese Nikkei 225 index closed up 0.2%. In China, the Shanghai Composite closed up 0.2%, while the Hang Seng index in Hong Kong is up 0.4%.
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