London open: FTSE flat ahead of busy reporting week

London stocks began the week in rather indecisive fashion as investors mull meetings this week from the Federal Reserve and the Bank of Japan and eye a busy week of corporate earnings reports.

The FTSE 100 was essentially flat after slightly more than half an hour of trading, up 1.7 points at 6,732.18, with no clear direction apparent among the main risers and fallers.

After its Friday fall, the FTSE 250 edged up 34 points to 17,021.72 led by William Hill as it hesitantly began talks with two smaller suitors.

The Fed will deliver its update on Wednesday, potentially offering clues about the timing of its next interest rate rise, while the BoJ on Friday is expected to explain its next move in terms of monetary stimulus.

“While there is no expectation of action from the FOMC later this week the same cannot be said of the Bank of Japan,” said CMC Markets’ Michael Hewson. “Japanese policymakers have been wrestling with a sclerotic economy for years now and with interest rates already in negative territory speculation has been rising that the next step could be direct monetisation in the form of “helicopter money.

“This still remains a risky next step simply because it’s never been done before and while Bank of Japan Governor Kuroda has gone to great lengths to rule it out, he also ruled out the prospect of negative rates three days before implementing them, hugely damaging his credibility in the process.”

On Monday’s economic calendar, UK CBI industrial trends are due out at 1100 BST.

On the corporate front, Randgold Resources was on the slide as it downgraded its full year targets due to hiccups at its Tongon mine in Cote D'Ivoire. The FTSE 100 firm said there had been extended down time on one mill as a result of poor repairs but that Tongon is set for an improved performance in the second half of this year. Speaking to local media at a regular briefing in Cote d’Ivoire, Randgold chief executive Mark Bristow said the mill had been down for 46 days during the past quarter, which impacted heavily on production. “The management team has revised the 2016 business plan and is now targeting to exceed 260 koz for the year,” Bristow explained. “It is worth noting, however, that it remains a profitable operation and, having paid back its capital in 2015, it has just declared a maiden dividend of $22m.”

Elsewhere on the FTSE 100, Hammerson posted its half-year report for the six months to 30 June on Monday and revealed it was to list on the Johannesburg stock exchange. Hammerson lifted net rental income 5.1% to £167.7m during the period, or 2.1% on a like-for-like basis. The FTSE 100 firm reported profit including valuation changes of £162.5m, a drop of 50.2%, with adjusted profit increasing 6% over the same period last year to £112.6m. Adjusted earnings per share were up 5.1% to 14.3p, and the board announced an interim dividend of 10.1p, up 6.3% on the first half of 2015.

William Hill was racing higher after Rank Group and 888 Holdings made a preliminary approach regarding a potential £3bn takeover for the struggling high street bookmaker. The move represents a humiliating turnaround for William Hill as it failed in a £700m bid for 888 last year due to an inability to agree on a price, which suggests negotiations could again be difficult. Furthermore, on Monday the FTSE 250 group rather superciliously cast doubt on the deal, saying "it is not clear that a combination of William Hill with 888 and Rank will enhance William Hill's strategic positioning or deliver superior value to William Hill's strategy".

Elsewhere on the mid-cap list, fund manager Aberdeen Asset Management reported a rise in third-quarter assets under management. For the nine months ended 30 June, assets under management came in at £301.4bn compared to £292.8bn at 31 March. The company said it experienced net outflows of £8.9bn during the quarter, but this was offset by £17.5bn of asset appreciation.

Food producer Greencore has acquired The Sandwich factory from Cranswick for up to £15m, which will be funded from existing debt facilities and is expected to be neutral to earnings in full-year 2016 and modestly accretive thereafter. Chief executive officer Patrick Coveney said: “This acquisition makes strong strategic sense for Greencore, given our ongoing focus on the food to go market. The Sandwich Factory will extend our reach into customer channels in which we are currently under represented, notably convenience stores and the travel sector, and will also bring new product types into the Greencore portfolio.”

Market Movers

FTSE 100 (UKX) 6,732.46 0.03%
FTSE 250 (MCX) 17,028.10 0.26%
techMARK (TASX) 3,418.56 0.14%

FTSE 100 - Risers

ITV (ITV) 190.00p 1.01%
Ashtead Group (AHT) 1,181.00p 0.94%
Taylor Wimpey (TW.) 148.20p 0.88%
BHP Billiton (BLT) 932.40p 0.82%
Wolseley (WOS) 4,103.00p 0.81%
Sky (SKY) 885.50p 0.80%
AstraZeneca (AZN) 4,645.50p 0.72%
Vodafone Group (VOD) 237.20p 0.70%
Persimmon (PSN) 1,608.00p 0.63%
Pearson (PSON) 974.50p 0.62%

FTSE 100 - Fallers

Randgold Resources Ltd. (RRS) 8,655.00p -2.20%
Barclays (BARC) 149.70p -1.38%
Royal Bank of Scotland Group (RBS) 186.80p -1.37%
Fresnillo (FRES) 1,807.00p -1.31%
Hikma Pharmaceuticals (HIK) 2,566.00p -0.93%
Standard Chartered (STAN) 607.90p -0.90%
Mediclinic International (MDC) 1,088.00p -0.82%
Centrica (CNA) 239.00p -0.71%
International Consolidated Airlines Group SA (CDI) (IAG) 403.20p -0.67%
Travis Perkins (TPK) 1,504.00p -0.66%

FTSE 250 - Risers

William Hill (WMH) 347.60p 10.84%
Euromoney Institutional Investor (ERM) 1,000.00p 4.49%
DFS Furniture (DFS) 217.70p 3.27%
CLS Holdings (CLI) 1,400.00p 3.17%
Wizz Air Holdings (WIZZ) 1,472.00p 3.08%
PayPoint (PAY) 987.50p 2.81%
Zoopla Property Group (WI) (ZPLA) 279.80p 2.72%
Rank Group (RNK) 243.30p 2.61%
CYBG (CYBG) 247.10p 2.28%
Jardine Lloyd Thompson Group (JLT) 1,009.00p 2.18%

FTSE 250 - Fallers

SIG (SHI) 98.60p -2.76%
Cairn Energy (CNE) 185.10p -2.27%
Henderson Group (HGG) 215.70p -2.13%
Tullow Oil (TLW) 208.20p -1.84%
Vedanta Resources (VED) 539.50p -1.73%
International Personal Finance (IPF) 332.70p -1.66%
Vesuvius (VSVS) 335.10p -1.38%
Atkins (WS) (ATK) 1,354.00p -1.17%
Hochschild Mining (HOC) 229.40p -1.12%
HarbourVest Global Private Equity Limited A Shs (HVPE) 910.00p -1.03%