London close: Stocks come off intraday highs as US data disappoints

UK stocks trimmed earlier gains by the close after a weak start on Wall Street, but still managed to finish in the green as markets bounced slightly following a sell-off the previous session.

London's FTSE 100 finished the session up 36.46 points, or 0.54%, at 6,809.50. The index had dropped 1.7% to a two-and-a-half-week low of 6,773.04 on Tuesday.

Stocks had jumped as much as 1% during the session after manufacturing purchasing managers' indices (PMIs) from China, Europe and the UK all showed an improvement in March.

Meanwhile, weak industrial jobs figures from China added to speculation that Beijing will soon inject more stimulus measures to shore up growth.

However, US equities opened on the back foot after economic data came in lower than expected, with ADP March payrolls rising at a mediocre pace and nationwide manufacturing activity growing at its slowest rate since 2013.

"From manufacturing this morning, the focus has shifted to employment, particularly the all-important US jobs situation, with the picture looking a lot less optimistic as we head towards the Friday jobs report," said analyst Chris Beauchamp from IG.

He said that as the US approaches full employment, it will be hard for the American economy to sustain the impressive run of good jobs reports over recent months.

In other news, Brent crude futures for May delivery were up 2.7% at $56.62 a barrel in afternoon trade as talks over Iran's nuclear programme continued.

Banking stocks rise

UK domestic banks such as Barclays, Lloyds and RBS were performing well after Morgan Stanley said quantitative easing in the Eurozone could help banking commission and trading income across the sector. Lloyds was also benefiting from a ratings upgrade to 'hold' by Jefferies which forecast a "more meaningful dividend" this year.

Specialist British bank Shawbrook made a stunning stock market debut in London with shares surging to well above the top of its preset price range of 290p.

Oil major Shell was making gains after being given the green light by the US government to restart an exploration campaign in the Alaskan Arctic.

Kingfisher retreated after a well-received annual report and strategy update on Tuesday, with Nomura weighing on the shares after lowering its target price from 315p to 305p, keeping a 'neutral' rating.

Asos saw profits fall by a tenth in the first half as a sharp drop in margins outweighed a strong sales performance, though results still beat analysts' expectations.

Russia-focused steelmaker Evraz surged after pledging to buy-back shares despite reporting a net loss of $1.28bn last year.

FirstGroup rose strongly after saying trading for the year to the end of March had remained in line with expectations, with progress continuing on its medium-term transformation plans.

Sportswear retailer Sports Direct was a high riser after Morgan Stanley started coverage with an 'overweight' rating, saying the business has the potential to replicate its UK success in many European markets.

Down on AIM, Nationwide Accident Repair Services surged after directors accepted a £43.2m cash takeover offer from private equity colossus Carlyle, a month after major shareholder Quindell sold its stake.

Market Movers
techMARK 3,143.88 +0.02%
FTSE 100 6,809.50 +0.54%
FTSE 250 17,123.41 +0.19%

FTSE 100 - Risers
Imperial Tobacco Group (IMT) 3,045.00p +2.77%
Barclays (BARC) 249.30p +2.76%
BG Group (BG.) 851.40p +2.70%
Fresnillo (FRES) 700.00p +2.56%
Randgold Resources Ltd. (RRS) 4,801.00p +2.30%
TUI AG Reg Shs (DI) (TUI) 1,211.00p +2.02%
Sports Direct International (SPD) 620.50p +1.89%
Aviva (AV.) 549.00p +1.67%
Friends Life Group Limited (FLG) 420.20p +1.60%
National Grid (NG.) 878.50p +1.60%

FTSE 100 - Fallers
Kingfisher (KGF) 368.00p -3.31%
Shire Plc (SHP) 5,260.00p -1.96%
Barratt Developments (BDEV) 521.00p -1.42%
WPP (WPP) 1,513.00p -1.18%
Carnival (CCL) 3,258.00p -1.15%
Standard Chartered (STAN) 1,082.00p -1.05%
Smith & Nephew (SN.) 1,132.00p -1.05%
3i Group (III) 477.40p -1.04%
Persimmon (PSN) 1,647.00p -0.96%
ARM Holdings (ARM) 1,095.00p -0.91%

FTSE 250 - Risers
FirstGroup (FGP) 97.15p +6.82%
Evraz (EVR) 197.50p +5.22%
Serco Group (SRP) 144.60p +4.86%
Cable & Wireless Communications (CWC) 63.80p +4.68%
Card Factory (CARD) 308.00p +4.30%
Marston's (MARS) 158.30p +3.94%
Go-Ahead Group (GOG) 2,413.00p +3.56%
TalkTalk Telecom Group (TALK) 355.50p +3.31%
Virgin Money Holdings (UK) (VM.) 411.00p +3.27%
Indivior (INDV) 196.10p +3.21%

FTSE 250 - Fallers
Ocado Group (OCDO) 339.40p -4.07%
NMC Health (NMC) 638.00p -3.99%
Thomas Cook Group (TCG) 141.60p -2.81%
Drax Group (DRX) 353.70p -2.80%
Imagination Technologies Group (IMG) 205.10p -2.70%
RPC Group (RPC) 564.50p -2.67%
Home Retail Group (HOME) 160.70p -2.61%
Balfour Beatty (BBY) 234.30p -2.42%
Booker Group (BOK) 142.40p -2.26%
Riverstone Energy Limited (RSE) 1,042.00p -2.25%