Last checked at LONDON (Alliance News) - UK stocks ended mixed Monday, as Greek debt continued to worry investors, while miner BHP Billiton led blue-chip decliners after its spin-off South32 was priced at the lower end of market expectations.
The FTSE 100 finished up 0.1% at 6,968.87 points, giving back some of its gains after surpassing the 7,000 mark shortly after the opening. Meanwhile, the FTSE 250 ended flat at 18,022.21, and the AIM All-Share finished down 0.3% at 759.99.
European indices fared better, with the CAC 40 in Paris up 0.4% and the DAX 30 in Frankfurt up 1.3%. At the European equity market close, Wall Street was trading firm, with the DJIA up 0.1%, the S&P 500 up 0.2%, and the Nasdaq Composite up 0.3%.
Greece has said it wants to reach a loan deal with its international creditors by the end of this month, BBC reported Monday afternoon, citing government spokesman Gabriel Sakellaridis.
"A deal is required immediately; this is why we are talking about the end of May, to resolve these critical liquidity issues," Sakellaridis said.
It also emerged over the weekend that Greek Prime Minister Alexis Tsipras had written to International Monetary Fund chief Christine Lagarde warning that last week's EUR750 million repayment to the IMF would be missed unless the European Central Bank immediately raised its curbs on Greece's ability to issue short-term debt, the Financial Times reported Monday.
The letter, first reported by the Greek daily Kathimerini but which the FT said it had independently confirmed, raises questions about how close Athens is to bankruptcy with the next EUR300 million IMF payment due on June 5, according to the British newspaper.
Athens ultimately made the payment without financial assistance from the bloc but only by tapping a rarely used emergency account Greece holds at the fund.
The euro slid to USD1.1352 Monday, down 0.8% in the day.
On the London Stock Exchange, BHP Billiton was the worst performer in the FTSE 100, down 4.6%, while its spin-off South32 finished slightly higher, up 0.6% at 104.67 pence, as the mining company began its first trading session in London.
South32, whose initial share price came in below estimates, also is listed on the Australian Securities Exchange and the Johannesburg Stock Exchange. The company's name comes from its assets being in the southern hemisphere, with its two regional centres, Australia and South Africa, being linked by the 32nd parallel south line of latitude.
Societe Generale analyst Alain William had valued South32 at 120.00 pence per share.
"The spin-off's Australian début at the lower end of market expectations (AUD11.3 billion vs. AUD7-15 billion range) will likely just go to emphasise the volatility and uncertainty surrounding commodities in light of global growth expectations," said Mike van Dulken, head of research at Accendo Markets.
Babcock International Group rose 2.8% after it reported strong growth in pretax profit for its last financial year as revenue was buoyed by major new contract wins and acquisitions.
The engineering support services company focused on infrastructure and big projects reported a pretax profit of GBP313.1 million for the year to end-March, up from GBP218.8 million a year earlier as its own revenue rose to GBP4.00 billion from GBP3.32 billion. Revenue including its share of joint venture and associates' revenue rose to GBP4.50 billion, from GBP3.55 billion.
Its closely-watched pretax profit, which also includes profit from joint ventures and associates but excludes exceptional items and amortisation of acquired intangibles, rose to GBP417.7 million from GBP316.1 million.
Royal Mail ended up 2.8%. Investec upgraded the delivery and parcel services company to Buy from Reduce, saying the company outlook has dramatically improved after competitor Whistl's suspension of delivery services. Investec suggested that it is possible for Royal Mail to outperform through cost saving measures. It estimates that Royal Mail could save around GBP400 million per year in the long term from the automation of parcels and benefiting from high levels of staff departures.
Weir Group ended up 2.0% at 1,936.00p, after Citigroup upgraded the oil and gas support service company to Buy from Neutral, lifting its price target to 2,200p from 1,750p.
Lloyds Banking Group ended down 1.0% after Investec downgraded the bank to Sell from Hold following a strong share performance that has pushed the stock up to levels it hasn't seen since late 2008. Meanwhile, Investec upgraded Royal Bank of Scotland to Buy from Hold, calling RBS its "top pick" in the sector. Investec said RBS is the least exposed FTSE 100 bank to the UK bank levy. RBS shares ended down 0.1%.
Gold miners supported the higher close of the FTSE 100, as the price of gold rose to its highest price in three months. The precious metal currently trades at USD1,226.95 an ounce, having hit a high of USD1,232.41 in earlier trade.
Fresnillo, up 5.4%, was the best performer in blue-chip index, while Randgold Resources ended up 0.8%. In the FTSE 250, Acacia Mining rose 0.9%, and Centamin ended up 3.0%.
Bwin.Party Digital Entertainment rose 9.3%, the best performer in the FTSE 250 and adding to its 11% gain on Friday. 888 Holdings gatecrashed GVC Holdings' reverse takeover offer for Bwin, announced on Friday, saying on Monday it has submitted a cash and shares takeover bid for the company. Bwin.Party confirmed it has received the proposal tabled by 888 and said its board and advisers are conducting a detailed review of the proposals it has so far received.
888 ended down 3.3%, and GVC up 1.0%.
Also in the FTSE 250, Aveva Group rose 9.0%. The engineering software company is understood to be an acquisition target for a slew of US and European suitors, The Sunday Times reported. Senior City sources told the newspaper that Aveva is likely to be targeted by French energy group Schneider Electric, US conglomerate General Electric Co, and US-based manufacturer Emerson Electric Co.
Manufacturing company Rotork plunged 90% after a subdivision of the shares came into effect Monday morning. Each of the company's existing ordinary shares of 5 pence each converted into 10 new ordinary shares of 0.5 pence each.
In the corporate calendar Tuesday, Vodafone, Land Securities Group, ICAP, BTG, Aveva Group, and Homeserve release full-year results. Greencore Group, Innovation Group and Paragon Group of Companies, Topps Tiles, Treatt and Big Yellow Group publish half-year results. Chesnara issues an interim management statement.
In the economic calendar, UK retail price, producer price and consumer price indices are due at 0930 BST. Meanwhile, the EU and German ZEW survey and eurozone consumer price index are due at 1000 BST. In the US, the Redbook index is due at 1355 BST.
By Daniel Ruiz; danielruiz@alliancenews.com
Copyright 2015 Alliance News Limited. All Rights Reserved.
27 Nov 2013 12:13
