Imagination Technologies Group Share News (IMG)

LONDON (Alliance News) - UK stocks closed mixed on Monday, as positive analyst notes boosted several blue-chip companies higher, which helped partly offset a hit to commodities stocks amid lower iron ore and copper prices.

The FTSE 100 ended down 0.2%, or 10.89 points, at 6,114.81. The FTSE 250 closed up 0.2%, or 38.30 points, at 16,687.06, and the AIM All-Share rose 0.1%, or 0.71 point, to end at 723.49.

Pharmaceutical stocks ended among the winners in the FTSE 100. AstraZeneca closed up 1.9%, having been upgraded to Strong Buy from Buy by Charles Stanley on Friday last week, while Shire ended 1.4% higher in the wake of a Buy rating and 4,700 pence price target put in place by Liberum also on Friday.

Smith & Nephew, the medical devices maker, closed up 2.8% after analysts at Jefferies on Monday moved the stock to Buy from Hold. Meanwhile, Berenberg maintained a Buy rating and 1,300p price target on the stock.

Chip designer ARM Holdings closed up 2.4% after China's state owned Tsinghua Unigroup International took a 3.0% stake in rival Imagination Technologies, which closed up 11%.

Investment bank Liberum said that Tsinghua taking a stake in Imagination Technologies could spark the sale of the company, as it believes significant shareholder Apple is unlikely to want Imagination's technology to go to China.

Commodities stocks suffered amid falling iron ore and copper prices, according to Jasper Lawler, market analyst at CMC Markets. Also weighing on sentiment, data showed that China's exports decreased unexpectedly in April, while the country's imports fell at a faster pace than had been expected. Lawler said the latest Chinese trade data "softens" the outlook for global growth.

Chris Beauchamp, senior market analyst at IG, said turmoil in iron ore prices has spread to other commodities, dragging the FTSE's mining contingent lower.

"Given the substantial rerating in mining firms since the February low it was always going to be difficult to sustain the rally without at least a modest correction, and the yo-yoing of iron ore prices has provided a perfect excuse for momentum traders to book profits and flee to safer pastures," Beauchamp said.

Anglo American was the biggest loser in the FTSE 100, down 14%. Other losers included Swiss commodities giant Glencore, down 8.7%, and Rio Tinto, down 8.2%. Antofagasta found itself off 5.7%, while BHP Billiton was down 4.2%.

Brent oil was quoted at USD43.825 a barrel Monday at the London equities close, down from USD45.77 a barrel on Friday. The North Sea benchmark had risen to as high as USD46.46, after a wildfire disrupted supplies from Canada's oil sands in Alberta. Royal Dutch Shell saw its 'A' shares fall 2.2% and its 'B' shares by 2.4%. Standard Chartered, an emerging markets bank with exposure to commodities financing, ended down 3.6%.

Gold miners Randgold, down 3.4%, and Fresnillo, down 6.1%, were giving back gains made on Friday after a sluggish US jobs report pushed expectations for the US Federal Reserve's next interest rate increase further into the future. Gold was quoted at USD1,266.09 an ounce at the London equities close on Monday, down from USD1,292.82 the same stage on Friday.

In the FTSE 250, security company G4S was among the list of risers, ending the day up 4.9%. Investors were reassured after G4S said first-quarter revenue from continuing businesses grew by 4.5% to GBP1.51 billion. No new provisions were booked on onerous contracts. In 2013, G4S and rival outsourcer Serco were found to have overcharged the UK Ministry of Justice for the electronic tagging of criminal offenders. This resulted in the pair being banned temporarily from winning new government contracts, limiting their ability to replace onerous contracts with more profitable new ones.

Investors showed an appetite for Greggs, the baker, up 2.7%. The company presented another positive trading update, with sales continuing to grow on the back of its refreshed and healthier product offering. Conditions on the UK high street were softer in March but have recovered in recent weeks, Greggs said.

Evraz closed down 11%, meaning the steelmaker was the biggest faller in the FTSE 250. AIM-listed Bushveld Minerals said it agreed to buy Evraz's 78.8% stake in Strategic Minerals Corp, the owner of the Vametco vanadium mine and plant in South Africa, for USD17.2 million.

Interserve, the support services company, down 5.8%, was also among the heaviest fallers in the FTSE 250. Analysts at Berenberg cut their price target on the stock to 520p from 645p after Interserve announced on Friday an increase in its net debt expectations following further deterioration in its UK construction business. Berenberg maintained a Buy rating.

On AIM, Iofina rose by 27%. The company, which specialises in the production of iodine and chemical derivatives, said its pretax loss narrowed to USD3.3 million in 2015, from USD6.7 million a year earlier. Iofina said its first-quarter production of 124.6 metric tonnes of crystalline iodine was in line with expectations, putting the company on track to reach its first-half target of 250 to 270 metric tonnes of crystalline iodine.

In Paris, the CAC 40 index ended up 0.5%, while the DAX 30 in Frankfurt finished up 1.1%.

US shares were mixed at the London close, with the Dow 30 down 0.3%, the S&P 500 up 0.1% and the Nasdaq Composite up 0.4%.

At the London equities close, the euro traded at USD1.1405, down from USD1.1423 at the equities close Friday. The pound was at USD1.4406, against USD1.4487 late Friday.

In the economic calendar, Tuesday will bring consumer price index data from China at 0230 BST, German trade data at 0700 BST, UK trade balance data at 0930 BST, US JOLTS job openings at 1500 BST, followed by API weekly crude oil stock data at 2130 BST.

In the UK corporate calendar, FTSE 100 budget airline easyJet reports first-half results. In the FTSE 250, trading statements are due from non-life insurer Hiscox, housebuilder Bovis Homes, and steam system engineer Spirax Sarco International. On AIM, pharmaceutical company Quantum Pharma reports full-year results, as does clinical research company Venn Life Sciences.

By Samuel Agini; samagini@alliancenews.com; @samuelagini

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