London close: FTSE ends lower after manufacturing PMIs miss forecasts

The FTSE 100 closed lower on Tuesday, led by a decline in mining stocks after disappointing Chinese and UK manufacturing data.

China’s official manufacturing purchasing managers’ index dropped to 50.1 in April from 50.2 in March, the National Bureau of Statistics revealed, missing economists’ estimates of 50.4. However it was above the 50 level that separates an expansion from a contraction.

The Caixin PMI on China manufacturing contracted further to 49.4 in April from 49.7 in March, according to Markit, below forecasts of 49.9.

“With the Caixin reading focusing on SME’s, it is clear that while large firms are feeling the benefits of government spending and increasingly expansionary policies at the PBoC, the smaller firms remain exposed to slowing growth and trade,” said Joshua Mahony, market analyst at IG.

Closer to home, UK manufacturing unexpectedly entered contraction territory in April.

The Markit/CIPS UK manufacturing PMI slipped to 49.2 in April from a downwardly-revised 50.7 in March, missing expectations for a reading of 51.2 and the first time the PMI has fallen below 50.0 in over three years.

The UK industry has been dragged lower by lacklustre trends in production and new orders, together with declines in both employment and stocks of purchases.

The worse-than-estimated manufacturing data sent mining stocks into the red, including Anglo American, Glencore, BHP Billiton and Rio Tinto.

Meanwhile, down under, the Royal Bank of Australia cut interest rates by 25 basis points to 1.75% to address a sharp decline in inflation in March.

Mike van Dulken, head of research at Accendo Markets, said it “will surely only go to fuel fears of another round of ‘currency wars’ as nations fight for that competitive edge via currency weakness”.

On the company front, RSA Insurance Group jumped after Barclays upgraded the stock to ‘overweight’ from ‘equalweight’ and lifted the price target to 545p from 457p.

Direct Line was also benefitting from a broker upgrade, as Macquarie upped its stance on the insurer to ‘neutral’ from ‘underperform’.

RBS was under the cosh after UBS downgraded the stock to ‘neutral’ from ‘buy’ and cut the price target to 250p from 310p, pointing to significant payout uncertainty.

Aberdeen Asset Management plunged after reporting a 40% drop in first half profit amid weakness in emerging markets. Numis cut the stock to ‘hold’ from ‘add’, saying said it was “an all-round bad set of results”.

Just Eat gained as it said it now expects full year profits to be larger than previously indicated after the number of famished Britons ordering takeaway food online continued to increase in the first three months of the year.

In commodities, oil prices fell with Brent crude down 2.3% to $45.76 per barrel and West Texas Intermediate down 3.06% to $44.45 per barrel at 1636 BST.

Market Movers

FTSE 100 (UKX) 6,190.80 -0.82%
FTSE 250 (MCX) 16,742.04 -0.35%
techMARK (TASX) 3,071.37 0.39%

FTSE 100 - Risers

RSA Insurance Group (RSA) 472.10p 2.83%
Carnival (CCL) 3,480.00p 2.44%
Admiral Group (ADM) 1,901.00p 2.37%
Sage Group (SGE) 603.50p 1.94%
Direct Line Insurance Group (DLG) 368.30p 1.77%
National Grid (NG.) 987.80p 1.33%
BT Group (BT.A) 448.95p 1.30%
ITV (ITV) 228.00p 1.24%
Smith & Nephew (SN.) 1,170.00p 1.21%
Intertek Group (ITRK) 3,293.00p 1.11%

FTSE 100 - Fallers

Anglo American (AAL) 665.70p -12.80%
Glencore (GLEN) 149.70p -8.10%
Antofagasta (ANTO) 446.00p -7.70%
Rio Tinto (RIO) 2,154.50p -6.35%
BHP Billiton (BLT) 875.30p -6.19%
Standard Chartered (STAN) 520.30p -5.76%
Rolls-Royce Holdings (RR.) 642.00p -4.11%
Old Mutual (OML) 178.10p -3.99%
Barclays (BARC) 164.75p -3.94%
Fresnillo (FRES) 1,071.00p -3.77%

FTSE 250 - Risers

Just Eat (JE.) 402.30p 4.90%
Interserve (IRV) 445.10p 4.17%
Regus (RGU) 304.20p 4.04%
Rightmove (RMV) 4,013.00p 4.02%
Greggs (GRG) 1,069.00p 3.48%
Shawbrook Group (SHAW) 296.00p 3.28%
Cable & Wireless Communications (CWC) 75.60p 2.72%
Wetherspoon (J.D.) (JDW) 679.50p 2.49%
Vesuvius (VSVS) 328.40p 2.21%
Homeserve (HSV) 423.00p 2.12%

FTSE 250 - Fallers

Tullow Oil (TLW) 247.20p -11.62%
Indivior (INDV) 147.60p -8.21%
Aberdeen Asset Management (ADN) 276.70p -7.37%
Amec Foster Wheeler (AMFW) 465.90p -5.67%
Vedanta Resources (VED) 398.00p -5.66%
Ophir Energy (OPHR) 71.15p -5.57%
Cairn Energy (CNE) 211.50p -5.54%
Weir Group (WEIR) 1,137.00p -5.25%
Kaz Minerals (KAZ) 162.60p -5.19%
Capital & Counties Properties (CAPC) 336.60p -4.78%