LONDON MARKETS: FTSE 100 Ends Higher, Helped By Gains For Schroders, BAE

By Carla Mozee and Victor Reklaitis, MarketWatch Features Dow Jones Newswires

Carillion shares sink nearly 40%

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U.K. stocks finished with gains Monday, as Schroders PLC and BAE Systems PLC outperformed among blue chips.

The FTSE 100 index rose 0.3% to end at 7,370.03, building on last week's gain of 0.5% (http://www.marketwatch.com/story/uk-stocks-fall-for-2nd-day-as-central-bank-fears-persist-2017-07-07).

Schroders (SDR.LN) tacked on 2.2% after RBC analysts upgraded the stock to outperform from underperform ahead of an earnings release on July 27.

The asset manager's "underlying business is in good shape and cost control will likely surprise on the upside," RBC's team wrote in a note. "Given Schroders' relative share price underperformance recently and a conservative consensus, we believe current levels represent an attractive entry point."

Aerospace company BAE gained 2% after a British court ruled against an anti-arms trade group that was seeking to stop sales to Saudi Arabia. A judgment in favor of the arms group could have put in jeopardy deals BAE has with the Saudis, a Dow Jones Newswires report said.

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Carillion crushed: Meanwhile on the midcap FTSE 250 , Carillion Plc (CLLN.LN) plunged 39% as the construction and facilities-services company warned that first-half operating profit will be lower than expectations. As well, the company said CEO Richard Howson has stepped down from his post and the board. Keith Cochrane will serve as interim CEO until a permanent replacement has been found.

"Long-standing Carillion bears, and these are legion, given the stock's position as one of the most heavily shorted on the London market, finally got their reward today, as the firm gave up on its dividend, exiled its CEO and unveiled a miserable trading update," said Chris Beauchamp, chief market analyst at IG, in a note.

"Clearly, the only hope now appears to be a rescue bid, although the firm looks an uncertain bet even if it is 40% cheaper than last week."

Miners, metals and China: Miners on Monday initially keyed off on losses in their Australian-listed shares "on account of a still weak oil price, another gold selloff and weakness among base metals even after solid China inflation data," said Accendo Markets in an early Monday note.

Read:China's consumer inflation remains steady in June (http://www.marketwatch.com/story/chinas-consumer-inflation-remains-steady-in-june-2017-07-09)

But mining shares managed to show gains by day's end, as gold futures turned higher, even as copper futures stayed lower.

Anglo American PLC (AAL.LN) finished higher by 1.6%, while Randgold Resources PLC (RRS.LN) (RRS.LN) tacked on 1.5%, and BHP Billiton PLC (BLT.LN) gained 1.7%. Copper producer Fresnillo PLC (FRES.LN) added 0.7%.

Chinese consumer and producer prices were steady in June, meeting expectations. Mining shares can be sensitive to developments from China because it is a major buyer of industrial and precious metals.

Pound steady: The rise for the FTSE 100 was also supported by a steady pound, which was little changed on Monday. Sterling bought $1.2888, compared with $1.2887 late Friday in New York. The pound lost ground against the U.S. dollar on Friday after the U.S. jobs report for June was strong enough to support the case for the Federal Reserve's plan to gradually raise interest rates.

A stronger pound can clip shares of multinationals on the FTSE 100, as those company make the bulk of earnings and sales in overseas markets.

(END) Dow Jones Newswires

July 10, 2017 12:01 ET (16:01 GMT)