Markets: Global fears weigh on FTSE 100 on Monday

Interactive Investor's Market Report brings you bite-sized news covering all the day's FTSE and AIM announcements, the latest on commodities, global and domestic economics, gold, oil and currencies as well as US markets. Updated throughout the day, it's the digest you can't afford to miss.

Last updated: 17:05

UK markets: Monday's close

Warning lights that the global economy is slowing down lit up across the world, causing the FTSE 100 (UKX) to decline on Monday.

Comments from the People's Bank of China warned over the weekend that the nation's economy is showing no signs of bouncing back in the third quarter, instilling a gloomy mood, while data from Germany appeared to show that even the eurozone's strongest economy is ailing.

The blue-chip index spent the whole day in the red, recovering somewhat from lows of nearly 50 points down to finish 13.78 points down at 5838.84.

Shire (SHP) was the biggest climber of the day, as it added 1.7%, whereas Eurasian Natural Resources (ENRC) didn't fare so well, losing 4%.

On AIM, Software Radio Technology (SRT) raced to the top and gained 28%, while AEC Education (AEC) stumbled down 26%.

Xcite Energy (XEL) continued its run as the most popular trade among Interactive Investor users, who bought and sold the stock in equal measure as it lost 4.6% of it value.

"The rhetoric from members of the German CDU party is becoming a little more frosty, as their patience with Spain's dawdling 'do they, don't they' stance on being bailed out by the eurozone is offering the markets another excuse to be nervous. It is exactly this sort of uncertainty that will see markets drift and bond yields rise," commented Alastair McCaig, market analyst at IG.

"The demise of JJB Sports (JJB), another of the high street names that have struggled with the poor UK economic climate, was long anticipated by markets. Although some parts of the firm are worth keeping and buyers may well be found for those, as a total entity it has for too long been a loss-making company."

At a glance...

Currencies	Commodities
GBP/USD: 1.6197	Gold: $1,762.30
GBP/EUR: 1.2541	WTI crude oil: $91.63
EUR/USD: 1.2910	All changes from 09:00 BST.

US markets: 16:45 update

Markets across the Atlantic fell on Monday, with the S&P 500 index extending losses into a third session, as European leaders differed on how to confront their regional debt crisis.

The Dow Jones slipped 29 points to 13551. The Nasdaq declined 22 points to 3158, while the S&P 500 saw a four-point decrease to 1456.

Tawa sheds subsidiary

Tawa (TAW) has signed a share purchase agreement to sell 100% of its shares in KX Reinsurance Company to Catalina Holdings.

The total consideration to be received at completion will be a minimum of $28 million (£17.2 million) in cash and could reach $30 million, depending on financial performance of KX between now and completion.

$15 million of this will be used to repay an inter-company loan facility between KX and Tawa on completion. The balance of the consideration received will be used for financing new opportunities, the repayment of debt and general working capital purposes.

Staffline makes acquisition

Staffline Group (STAF) has acquired Go New Recruitment, a provider of driving and logistics recruitment services.

The firm said the purchase was in line with its existing business strategy of targeting selective bolt-on acquisitions operating in relevant fields to both expand its customer base and broaden its revenue mix.

Go New is a recruitment service provider to the logistics, manufacturing, supply chain and transport industries with offices located in eight sites across central and south-western England. The company works with small and medium-sized businesses as well as blue-chip clients within a variety of sectors.

Bango Facebook integration launched

Bango (BGO) has announced that its integration with Facebook (FB) is now live. Bango is providing Facebook with mobile web carrier billing in Germany, the UK and USA, with the service is being expanded to other countries during the remainder of 2012.

This enables Facebook's mobile web users to purchase digital content without the use of premium SMS messages or the limitations of credit cards.

The news caused shares in Bango to climb over 6% on Monday.

UK markets: 15:00 update

The FTSE 100 (UKX) continued to linger in the red as Monday wore on, with the index falling 25 points to 5827.

Eurasian Natural Resources (ENRC) led the blue chips downwards, declining almost 5%. Ashmore Group (ASHM) was the highest climber, up almost 1%.

On the AIM front, shares in Oilex (OEX) plunged more than 73%. Software Radio Technology (SRT) soared 27%.

At a glance...

Currencies	Commodities
GBP/USD: 1.6190	Gold: $1,761.26
GBP/EUR: 1.2546	WTI crude oil: $91.81
EUR/USD: 1.2905	All changes from 09:00 BST.

US markets: Monday's open

Wall Street opened lower on Monday as technology stocks provided drag and weak German data further dampened spirits.

The Nasdaq lost 20 points to 3160, while the Dow Jones lost 48 points to 13533. The S&P 500 declined six points to 1454.

Microsaic appoints new CEO

Microsaic Systems (MSYS), the developer of miniaturised chip-based scientific instruments, will appoint Colin Jump as its new chief executive.
 
Jump has nearly 30 years of commercial and operational experience in the analytical instrumentation sector. He will join Microsaic from Shimadzu UK, a global manufacturer of scientific research instruments, where he spent the past 11 years as managing director.
 
He will take up his role on 5 November 2012, at which point Eric Yeatman and Colin Nicholl will resume their former roles as chairman and deputy chairman, respectively.

Orchid shares suspended

Orchid (OCH) is at an advanced stage of negotiations regarding an equity fundraising and capitalisation of certain debt and as such has delayed publishing its interim results, causing its shares to be suspended.

Under AIM rules, the group is required to publish its half-yearly report for the six-month period ended 30 June by 30 September, but the directors decided it was in the group's interests to complete the equity fundraising and debt capitalisation prior to signing its accounts.

Diploma on track

Diploma (DPLM) will reveal "a strong set of results" in line with market consensus, the firm said in a statement on Monday.

Revenue for the year to 30 September is expected to be around 13% ahead of the pervious year, with underlying sales likely to be 5% higher.

Strong cash flows in the final quarter of the year will result in year-end net cash being strongly positive, the company assured investors.

Operating margins remain ahead of the prior year, but below the record level of 20.8% reported in the first half of this financial year.

QinetiQ exceeds expectations

QinetiQ's (QQ.) performance during the first half of the financial year was stronger than originally expected, the firm said in a trading update. The stock climbed almost 5% on the news.

During the period its global products division delivered the majority of two key orders for the Q-Net vehicle survivability product, earlier than originally planned. This, together with a higher level of spares sales, more than compensated for lower sales in other major products.

UK services continued to perform well, benefiting from a more competitive cost base and better project execution. This was partially offset by the performance of US services, which reflected the considerable uncertainties in the federal services market and ongoing delays in contract awards.

Board change for Michael Page

Recruitment firm Michael Page International (MPI) has announced that following the completion of an external recruitment process, Simon Boddie has been appointed to the board as an independent non-executive director and member of the audit, remuneration and nomination committees, effective on Monday.

Boddie has been group finance director of electronics distributor Electrocomponents (ECM) since September 2005. He joined Electrocomponents from drinks manufacturer Diageo (DGE), where he held a variety of senior finance positions over a 13-year career, latterly as finance director of key markets.

Aberdeen assets edge up

Aberdeen Asset Management (ADN) managed to grow its assets under management slightly in the two months to 31 August.
 
Assets reached £184 billion, from £183 billion a year ago. There was gross new business of £6.1 billion in the period under review, with net outflows of £100 million.

Martin Gilbert, chief executive of Aberdeen, commented: "With uncertainty surrounding the global macroeconomic situation our disciplined and fundamental approach to investing continues to attract flows from a wide range of clients from around the world."

San Leon Energy updates on Nowa Sol Concession

It was a day of positive news and updates from five oil and gas companies, including San Leon Energy (SLE) and Bayfield Energy (BEH).

Read: Monday's oil and gas news, to see what they had to say.

UK markets: Midday update

The FTSE 100 (UKX) continued to slip on Monday as eurozone and US worries weighed on sentiment.

London's leading share index slipped 34 points to 5817.

Eurasian Natural Resources (ENRC) led the blue chips downwards, declining almost 5%. Centrica (CNA) was the highest climber, up 0.65%.

On the AIM front, shares in Software Radio Technology (SRT) soared 25%.

Xcite Energy (XEL) was the most actively-traded stock by the users of Interactive Investor.

"Renewed wrangling over the timing of deficit reduction threatens to upset some of the delicate balance reached in August by the [European Central Bank President Mario] Draghi plan," commented Chris Beauchamp, market analyst at IG. "French comments that Greece should be given more time risk a new rift with Berlin, which has been adamant that no more time is possible."

He added: "Like an exhausted fireman... Draghi must now turn his attention back to Athens, even as he aims to keep Spain and Italy out of the danger zone."

Looking ahead, Beauchamp was expecting the Dow Jones to open around 36 points lower.

At a glance...

Currencies	Commodities
GBP/USD: 1.6204	Gold: $1,756.98
GBP/EUR: 1.2559	WTI crude oil: $91.47
EUR/USD: 1.2906	All changes from 09:00 BST.

BAE will leave deal if US ties harmed

BAE Systems (BA.) has said it will scrap the proposed merger with EADS if the deal affects its Special Security Arrangement with the Pentagon.
 
The agreement with the US Department of Defence has opened the door for the arms firm to a number of big national security projects such as the $1,500 billion (£900 billion) F-35 strike fighter programme.
 
EADS also has a Special Security Arrangement, but the conditions are stricter and mean that projects must be run by an American-led proxy company that is not under day-to-day control of the parent.

KEFI Minerals edges higher on drilling results

Saudi Arabia-focused KEFI Minerals (KEFI) on Monday announced diamond drill results from the initial drilling programme at Selib North, along with results from continued surface trenching at the Jibal Qutman Licence.

"The initial drill results confirm a promising new discovery at Selib North. To our knowledge, this style of gold mineralisation has not been documented in the Arabian Shield before and could be potentially part of a large intrusive system,” commented managing director Jeff Rayner.

Read: KEFI Minerals announces promising drilling results, for more.

Cable reveals £1bn business bank

The government will use £1 billion to establish a bank to aid small and medium businesses.

Business secretary Vince Cable will tell the Liberal Democrat conference that the body will increase the amount of lending to business by offering loans to businesses that cannot get them elsewhere.
 
The bank will operate through existing lenders and will get going in the next 18 months.

Bumi investigates financial irregularity claims

Shares in Bumi (BUMI) lost a third of their value early on Monday as the firm announced that it has become aware of allegations concerning potential financial and other irregularities in the company's Indonesian operations. Meanwhile, Petra Diamonds (PDL) announced increased revenue in its preliminary results for the year ended 30 June.

Find out what else they, and four other miners, had to say in: Monday's mining news.

JJB Sports enters administration

Flailing sports retailer JJB Sports (JJB) has appointed administrators to undertake the sale of its trade, assets and brands.

The announcement came after JJB announced a formal sale process on 30 August. While the company and its advisers had held discussions with a number of selected parties, the board on Monday confirmed that it did not have, nor did it now expect to receive an offer for the shares of JJB Sports.

For the full story, read: JJB Sports calls in administrators.

Soros buys stake in Lookers

George Soros has bought a 4.5% shareholding in Manchester-based car dealership Lookers (LOOK).

The billionaire made the move last week that saw the company's second biggest shareholder, Trefick (Jack Petchey), selling the 17.3% stake it assembled during an unsuccessful attempt to buy the business last year. This stake was seen as an overhang by some investors and also restricted liquidity in the stock.

"Now this has been removed, we would expect the share price to respond accordingly once the discount has been digested by the market," said Mike Allen, analyst at Panmure Gordon.

He added: "We see Lookers as strong operators, and should remain in a position to outperform its key end markets despite the difficult macro backdrop." He had a 'buy' rating on the stock.

Dairy Crest to pay farmers more

Dairy Crest's (DCG) interim management statement for the period covering 1 April to date indicated that revenues of its four key brands grew in the low double digits in both volume and value terms.

While trading within the dairies business remained challenging, the company announced increases to the price paid to farmers for its milk, bringing it more in line with its competitors. The company also confirmed it is proposing to shift spreads production from Crudgington to Kirkby, further improving the operating efficiency of the business.

Dairy Crest's shares have risen by 1% year to date and have underperformed the FTSE All Share by 6%. The stock is currently trading on a 2013 price to earnings ratio between 11 and 12 times. Panmure Gordon's Damien McNeela said that the valuation was "too cheap given the underlying growth of its key brands, ungeared balance sheet and improving situation in the dairies division."

AG Barr results in line

AG Barr's (BAG) interim results were broadly in line with expectations, with revenue growth of 4.9% to £130 million, ahead of the soft drinks market, and operating profit falling approximately 7% lower to £15.6 million.

The company's key brands experienced further growth, with Barr up 9.7% and Rubicon up 7.3%, as the company increased the geographic distribution of these products.

On 5 September, AG Barr confirmed it had approached LSE:BVIC:Britvic with a view to a possible merger, with Britvic shareholders owning 63% of the enlarged group and AG Barr's shareholders owning 37%. AG Barr confirmed merger talks were ongoing.

AG Barr's shares have risen by 13% during the year to date and have outperformed the FTSE All Share by 5.3%. The stock is currently trading on a 2012 price to earnings (PE) ratio of 20 times. "We believe that the majority of any potential synergies from the merger with Britvic are already reflected at current levels," commented Damien McNeela, analyst at Panmure Gordon. He maintained his 'hold' recommendation.

UK markets: 09:00 update

The FTSE 100 (UKX) opened on a subdued note on Monday as tensions between China and Japan continue to simmer, while closer to home, senior European Union (EU) officials warned that it was proving harder than ever to reach an agreement on the EU's next multi-annual budget.

London's leading share index slipped 18 points to 5833.

Evraz (EVR) led the blue chips downwards, declining 3.5%. Reckitt Benckiser (RB.) added 1%.

On the AIM front, KEFI Minerals (KEFI) lost three-quarters of its market capitalisation. Shares in Software Radio Technology (SRT) soared 25%.

Xcite Energy (XEL) was the most actively-traded stock by the users of Interactive Investor.

"In Europe, with the pressure to act relieved by the European Central Bank's outright monetary transactions, politicians are once again dragging their feet over important reforms, including new rules on banking oversight, a response to Greece's inability to meet its targets and the question of when and how Spain might ask for financial assistance," commented Rebecca O'Keeffe, head of investment at Interactive Investor.

"With politicians only galvanised by pressure from the markets, it may take another spike in bond yields to elicit further action."

Across the Atlantic, August's Chicago Fed index will be released at 13:30 BST on Monday, with the Dallas Fed manufacturing index due at 15:30 BST.

At a glance...

Asian markets	Currencies	Commodities
Nikkei 225: 9069 ( 40)	GBP/USD: 1.6224	Gold: $1,762.65
Hang Seng: 20690 ( 44)	GBP/EUR: 1.2527	WTI crude oil: $92.10
Shanghai Composite: 2033 ( six)	EUR/USD: 1.2945

08:00 - The FTSE 100 (UKX) opens at 5852.62.