LONDON (Alliance News) - London stocks opened mixed Monday despite a weak close in New York on Friday while Chinese stocks were mixed and Tokyo was closed for a bank holiday, with RSA Insurance shares plunging after Zurich withdrew from takeover talks with the London-listed insurer.
The FTSE 100 was up 0.3% at 6,118.84, the FTSE 250 was down 0.1% at 16,912.40 and the AIM All-Share was down 0.2% at 740.97. In Europe, the CAC 40 in Paris was up 0.6% and the DAX 30 in Frankfurt was down 0.2%.
Shares in RSA Insurance tumbled 21% after it confirmed Monday an earlier statement by Switzerland's Zurich Insurance Group that the latter has pulled out of talks to acquire the UK insurer.
RSA said that as a result of the recent deterioration of trading conditions in Zurich's general insurance arm, it had decided to pull out of the talks. RSA said Zurich had confirmed its due diligence findings were in line with its expectations and it had not found anything related to RSA that would have prevented it from going ahead with the talks.
Zurich said in a short statement earlier on Monday morning that discussions with RSA about making a bid for the British insurer had been terminated, without providing any further details. Zurich originally disclosed an interest in bidding for RSA at the end of July. It then had bid around GBP5.6 billion in a deal RSA said it was willing to recommend to shareholders.
RSA Insurance shares are trading at 401.60 pence, relatively close price to its price of 435.50p before Zurich confirmed interest in the FTSE 100-listed insurer. The stock had reached two-year highs in 2015, touching a high of 528p in early-August.
In the green, Shire was leading the blue-chip index, up 3.3%, after being upgraded to Overweight from Equal Weight by Barclays. Its shares are also pushing higher after the Irish pharmaceutical company said it has received approval from the European Commission for Intuniv for the treatment of attention deficit hyperactivity disorder in children and adolescents from 6 to 17 years old for whom stimulants are not suitable, not tolerated or ineffective.
Satellite communications company Inmarsat was up 1.6% after saying it has agreed a strategic partnership with German telecommunications provider Deutsche Telekom to develop a new combined satellite and a high-speed ground network, to be dubbed the 'European Aviation Network.'
The network is designed to provider in-flight high-speed internet access in Europe. The network will combine coverage from Inmarsat's new S-band satellite with a ground network operating in the same frequency band developed and run by Deutsche Telekom.
Meanwhile, building products company Wolseley was up 1.0% at 4,173p after Credit Suisse raised its price target to 4,900p from 4,400p, keeping an Outperform rating.
Meanwhile, in the FTSE 250, Rotork was down 5.1% after JPMorgan Cazenove downgraded the actuators and flow control products manufacturer to Neutral from Overweight.
"There still appears to be a relatively downbeat mood in the markets at the moment," says Oanda analyst Craig Erlam. The analyst notes that the outcome from the US Federal Reserve Federal Open Market Committee's decision not to raise rates on Thursday is weighing on investor sentiment.
Erlam says that though many institutions, such as the International Monetary Fund and the World Bank, had been calling for the Fed to leave interest rates unchanged, as it did, "it seems though that it has not received the backing of investors as it both calls into question the strength of the US and global economy and leaves a cloud of uncertainty hanging over the markets."
The Fed left interest rates unchanged at 0% to 0.25% saying that recent global economic and financial developments may restrain economic activity and are likely to put further downward pressure on US inflation in the near term.
On Friday, Wall Street ended sharply lower. The Dow 30 closed down 1.7%, the S&P 500 off 1.6% and the Nasdaq Composite down 1.4%.
In China on Monday, Hong Kong's Hang Seng was down 1.0% and the Shanghai Composite closed up 1.9%. The Japanese stock market will be closed until Wednesday, due to several holidays, coming back to trade on Thursday.
In Greece, claiming a surprising victory with projections showing more than 35% support Sunday, Alexis Tsipras' SYRIZA party will form a coalition with former partner Independent Greeks and "continue fighting for the sake of the people".
While projected turnout was the lowest it has been since at least 1950, the outcome belied forecasts by pre-vote surveys and analyses. It ensured SYRIZA a mandate to govern over a difficult implementation of bailout conditions over the next four years.
"We have fought against much stronger powers and SYRIZA has proved that it is too tough to die, because it has deep connections with the people," Tsipras said during a victory speech alongside Independent Greeks leader Panos Kammenos.
Independent Greeks (ANEL) had been the junior coalition partner of SYRIZA after Tsipras' party rose to power in a wave of support for his anti-austerity platform in January. According to tallies by the Ministry of the Interior, SYRIZA was projected to win 145 seats and Independent Greeks 10 in the 300-seat parliament.
On the economic calendar Monday, in the US, existing home sales are expected at 1500 BST, while Federal Reserve Bank of Atlanta President Dennis Lockhart speaks before the Buckhead Rotary Club in Atlanta at 1800 BST.
By Daniel Ruiz; danielruiz@alliancenews.com
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