FTSE 100 shares fell on Monday led by pharma Hikma.
The FTSE 100 blue-chip ticker was down 0.5% at 6,986 with Hikma (LON:HIK) down 2.8% to 1,854p on no fresh news.
Anglo-American (LON:AAL) was the second biggest faller of 2.6% to 1065.5p followed by Randgold Resources (LON:RRS), down 2.4% to 6985p.
Easyjet (LON:EZJ) remained among the best performers. Shares closed 1.4% higher at 931.5p after an upgrade from UBS, which gave the firm a "buy" rating.
High-end fashion house Burberry (LON:BRBY) was down 2.1% at 1463p as rumours of a merger with US fashion house Coach petered out and investors booked profits awaiting further news.
The mid-cap FTSE 250 was down 0.4% to 17,860 and led by Cobham plc (LON:COB) down 13% to 139.7p after it downgraded its full-year outlook for earnings. Although management expects an improvement in the fourth quarter, it said the overall full year outcome was likely to be below its initial estimates and cut its trading profit guidance to £255-275m, which includes favourable currency impacts.
The FTSE AIM 100 Index closed down 0.5% at 3,954 while the FTSE AIM All-Share Index shed less than other major tickers, down 0.3% to 825.
Stocks gaining in London were 30% and losers 33%.
Avocet Mining (LON:AVM) was the rock bottom in terms of losers. It flew low by 20% to 66.625p after the company said gold from the Inata mine in Burkina Faso was seized earlier this month by bailiffs acting on behalf of ex-workers of Société des Mines de Bélahouro SA (owner of the Inata gold mine), who had been laid off following the illegal strike in December 2014.
They took seizure of a gold shipment containing approximately 1,400 ounces on Friday 7 October, the company confirmed on Monday.
Midsession
Crude oil backs off as Baghdad wants to dodge OPEC freeze
FTSE 100 up marginally 1pm
CBI figures point to manufacturing pain, pound under pressure
easyJet rises thanks to UBS upgrade to 'buy'
Cobham nosedives on profit warning
ITV up as AT&T’s £70bn Time Warner swoop puts M&A in spotlight
Oil prices back off as Iraq wants to dodge the OPEC freeze – 14:45
Crude prices backed off around 1% on Monday after Iraq dealt a blow to sentiment, as the major OPEC contributor said it wanted to be exempt from the deal to cut output.
SOMO, Baghdad’s state-backed oil marketer, claimed Iraq would be producing 9mln barrels per day if it wasn’t for the wars in the country (it currently produces just shy of 5mln barrels per day).
Iraq’s resistance contrasts to Iran, which has reportedly said it will encourage other OPEC members to join the freeze.
In London, Brent crude was changing hands at around US$51.30 per barrel while West Texas Intermediary futures were down 1.2% to US$50.20.
Is easyJet oversold? - 13:00
A note from the well-ranked transport team at UBS helped alleviated the stress at easyJet PLC (LON:EZJ) the shares back on the ‘buy’ list - Read the full story here
The impact was to propel the stock to the top of the risers’ list with a 3% gain.
Okay, the Swiss bank’s number crunchers have pegged their valuation a tad – to £10.50 a share from £10.70 – but they are reasonably upbeat on the Luton-based low-cost giant.
“Based on current forecasts easyJet's valuation appears favourable compared to the historic trading multiples,” UBS told investors. “We now place easyJet on a slight recovery multiple.”
The FTSE 100, meanwhile, was up 11 points at 7,031.88.
FTSE 100 index flat - 12.00
British American Tobacco (LON:BA.="" rel="8223">LON:BA.S) will likely have to significantly up the ante in its £38bn bid to acquire full control of US partner Reynolds America, rendering the deal far less attractive.
That, at least, is the view of a leading brokerage, which has taken a closer look at the putative transaction.
RBC Capital Markets is assuming BATS will have to weigh in with a 30% premium to the pre-bid price in order to land the biggest fag maker in the US.
The RBC number cruncher rates the stock ‘underperform’ although he did tweak up his valuation by £1 per share to £44 after re-running his numbers.
Last week BATs said it would pay Reynolds’s investors $56.50 per share in a cash and shares deal for the Lucky Strike and Camel cigarette maker.
The British group, currently the world’s second-largest tobacco firm behind Malboro maker Altria, already has just over 42% of Reynolds.
At midday, the FTSE 100 was trading almost flat at 7,021.95 as the latest CBI industrial trends survey pointed to some post-Brexit problems for the manufacturing sector.
EasyJet among the risers thanks to broker upgrade to ‘buy’ - 11:30
easyJet shares gained nearly 3% on Monday as it was written up by UBS, with the Swiss investment banking moving to ‘buy’ and setting a £10.50 price target.
Deutsche has lifted its target on Acacia Mining PLC (ACA.LN) and repeated a 'buy' on the stock, saying the turnaround story is progressing well.
Jefferies, whilst looking ahead to Shell’s Q3 results, said he is expecting to see improvement in cash generation.
That said analyst Jason Gammel, who rates Shell as a ‘buy’ with a 2400p target, said the overall figures could potentially distract from Shell’s core business – as it could include restructuring charges, impairments and other one-offs.
FTSE 250 profit warning: Cobham shares nosedive – 10:00
A profit warning sparked something of a nosedive for Cobham Plc (LON:COB) as the FTSE 250 fighter jet engineer dropped some 18% in Monday’s early deals, to change hands at 131p.
It is the latest ‘mid cap’ profit warning to hit a market where a rally in large multinational blue chips, taking the FTSE 100 to near record levels, somewhat masks a lack of strength in depth.
Monday's Top Risers and Fallers
Elsewhere, Avocet Mining dropped 17.5% to 68.56p after 1,400 ounces of gold (worth about US$1.7mln at market prices) were seized by bailiffs working on behalf of laid off mine workers.
Small cap oiler Frontera was an AIM market standout, rising 29%, thanks to six new wells which will soon be stimulated in the Republic of Georgia.
Meanwhile, at 10:00, London’s FTSE 100 was up just 13 points to 7,033.
FTSE 100 opens weekly account in credit with ITV in demand - 8:30
The FTSE 100 opened its weekly account in credit with Asia’s equity markets offering London some support.
At 8.30am, the index of blue-chip shares was up almost 42 points at 7,062.36.
Leading the way was ITV PLC (LON:ITV), which was in demand after AT&T’s £70bn swoop for media giant Time Warner.
Sky PLC (LON:SKY) was dragged along too, while the miners were well bid too.
Royal Bank of Scotland PLC (LON:RBS) was one of only four losers early on. The list also included AstraZeneca PLC (LON:AZN), Shire Plc (LON:SHP) and gold miner Randgold Resources (LON:RRL).
Stepping down a tier, shares in the aerospace group Cobham PLC (LON:COB) opened 14% lower after it sounded the earnings alarm for the second time this year, blaming the continued stuttering performance of its communications arm.
Cobham is becoming something of a serial offender. In April the company, which makes jamming and missile guidance systems for fighter jets, was forced to launch a £500mln emergency fundraiser as it trading began to lag.
In August it announced that chief executive Bob Murphy would be leaving to be replaced by David Lockwood, the boss of Laird (LON:LRD), the electronic components firm that makes parts for the iPhone.
Laird was one of a four FTSE 250 companies last week to warn that recent trading had been tough.
Keller, NCC Group and Senior were also heavily marked down after they were forced to adjust down earnings expectations.
FTSE 100 to open in positive territory - 7:00
The FTSE 100 looks set to open the week in positive territory, taking its cue from Asia’s main markets.
The index of blue-chip shares will advance around 28 points to 7,048.47, according to spread betting firms.
In Japan overnight, slightly better-than-expected export data gave a modest boost to the Nikkei, which was up 0.2%.
The market was initially subdued in mainland China after the authorities devalued the yuan. However, by mid-afternoon there was a greater sense of optimism as the Shanghai Composite advanced 1.3%. In Hong Kong, the Hang Seng rose 0.3%.
Two weeks out from a meeting of the US Fed any data thrown into the pot will be closely scrutinised. We have third-quarter GDP figures from the world’s largest economy – but not until Friday.
Before that, expect a welter of large-cap earnings, including updates from the tech giants Twitter, Apple and Amazon.
Here in the UK, the banks let us in on their progress this week with Lloyds, lon:ba.="" rel="3428">Royal Bank of Scotland lifting the lid on trading on Wednesday, Thursday and Friday respectively.
On the macro front, the UK serves up GDP figures on Thursday that are likely to show that growth has significantly weakened in the July to September quarter.
The economy is expected to have expanded by just 0.3%, according to a poll of experts, down from a pre-Brexit 0.7% in the prior three months.
- Brent crude 22 cents lower at US$51.66 a barrel.
- Gold US$4.10 lower at US$1,263.60 per ounce.
- Pound US$1.2196.
Bids and Rumours
- The US telecoms giant AT&T has agreed to buy Time Warner for US$85.4bn, creating a new media behemoth that will control both content and its distribution.
City Headlines
- BAE Systems is identified as the employer that will struggle the most to honour pension promises in an analysis of retirement provision by British companies – Times.
- Rolls-Royce is boosting retirement benefits for 86,000 UK workers and pensioners, even as fellow blue-chip companies claim they have no option but to cut retirement promises which they say are now unpayable in full – FT.
- Deutsche Bank is set to declare a bumper loss for the third quarter with tougher capital requirements for banks deemed to be of global importance to the world’s financial system threatening to add to its woes –Times.
- Microsoft is to increase its prices by as much as 22% in the because of sterling’s recent decline, a rise that is likely to affect thousands of businesses and could cost the Governments tens of millions of pounds – Telegraph.