London close: Stocks decline as investors digest services PMIs

UK stocks were in negative territory as oil prices wavered and investors sifted through a batch of services data.

UK services sector growth accelerated in March but remained subdued, according to a survey by Markit/CIPS.

The purchasing managers’ index rose to 53.7 last month from 52.7 in February, beating forecasts of 53.4 and remaining above the 50 level that separates an expansion from a contraction.

However, Markit said the improvement was “insufficient to prevent the data from indicating a slowdown in economic growth in the first quarter”.

“At 53.7, the weighted average output index from the three surveys was up from 52.9 in February, when the index sank to the greatest extent for four-and-a-half years,” said Chris Williamson, chief economist at Markit.

“The resulting first quarter average PMI reading is consequently the lowest since the second quarter of 2013.”

Earlier, Markit’s Eurozone services PMI was revised down to 53.1 in March from a previous estimate of 54.0. It compared to a reading of 53.3 in February and forecasts of 54.0.

US services data was more upbeat.

Markit’s final US business services PMI rose to 51.3 in March from 49.7 in February and the 'flash' estimate of 51.0, better than the 51.0 economists had pencilled in.

ISM’s non-manufacturing services composite also exceeded forecasts, rising to 54.5 in March from 53.4 in February. Analysts had predicted a reading of 54.1.

Separate US data showed the trade deficit rose 2.6% to $47.1bn (£33.31bn) in February as a rebound in exports was offset by an increase in imports, the Commerce Department said. Economists had expected a deficit of $46.2bn.

Meanwhile, Chicago Federal Reserve President Charles Evans said in Hong Kong that the central bank has to be proactive and aggressive to reach its 2% target. The Fed's preferred annual measure of inflation came in flat at 1.7% in February.

In Germany, a report revealed factory orders rose 0.5% in February compared to the same month a year ago, missing expectations for 2.2% growth.

In commodities, oil prices remained volatile as government data showed a surprise fall in gasoline demand in the US in January and as the market raised doubts that global crude producers would reach an agreement to freeze production at a meeting on 17 April.

Saudi Arabia said on Friday it would only freeze production if Iran follows suit. However, Iran has ruled out freezing output until its production recovers to levels seen before its sanctions.

At 1627 BST, Brent crude rose 0.02% to $37.70 per barrel and West Texas Intermediate climbed 0.05% to $35.72 per barrel.

On the corporate front, heavily-weighted miners were the worst performers, with Glencore, Anglo American, Rio Tinto and Antofagasta all firmly in the red.

“Some heavy declines in industrial metal and oil prices over the past three days is taking its toll on the UK-listed mining companies, with basic resources the worst performing sector on the FTSE 100,” said Jasper Lawler, market analyst at CMC Markets.

London Metal Exchange traded three-month copper fell 0.9% to $4,761.50 per metric tonne at 1330 BST.

Housebuilders were having a good day after a poll by OBR showed 51% of Britons planned on voting to remain in the EU at the 23 June referendum. Berkeley Group Holdings, Persimmon and Taylor Wimpey were among the biggest risers.

Payments firm Worldpay was on the front foot again on Tuesday, with Accendo Markets’ Mike van Dulken citing a revival of interest into April/Q2.

Tesco was lower after Deutsche Bank downgraded its stance on the stock to ‘hold’ from ‘buy’ with an unchanged price target of 210p. Research by Kantar Worldpanel also revealed the supermarket, along with J Sainsbury, had lost market share to rivals.

Moss Bros Group’s shares gained after the menswear retailer posted a rise in full year profit and sounded an upbeat note on current trading.

Electrocomponents jumped after saying it expected full year profits to hit the top end of market expectations, following a solid fourth quarter in which the UK recovery gained pace.

Card Factory edged higher after reporting its full year pre-tax profit almost doubled to £83.7m, driven by strong sales and new store openings.

Motoring services company the AA fell after it said revenue slipped 0.4% to £968m in the 12 months to 31 January

Market Movers

FTSE 100 (UKX) 6,097.34 -1.09%
FTSE 250 (MCX) 16,723.74 -0.72%
techMARK (TASX) 3,100.57 -1.02%

FTSE 100 - Risers

Berkeley Group Holdings (The) (BKG) 3,283.00p 2.56%
Randgold Resources Ltd. (RRS) 6,335.00p 2.10%
London Stock Exchange Group (LSE) 2,818.00p 1.00%
Worldpay Group (WI) (WPG) 280.50p 0.90%
Persimmon (PSN) 2,123.00p 0.76%
Taylor Wimpey (TW.) 192.30p 0.73%
Reckitt Benckiser Group (RB.) 6,780.00p 0.68%
Bunzl (BNZL) 2,028.00p 0.65%
Land Securities Group (LAND) 1,103.00p 0.55%
Barratt Developments (BDEV) 570.00p 0.53%

FTSE 100 - Fallers

Glencore (GLEN) 141.85p -5.31%
BHP Billiton (BLT) 736.10p -4.37%
Standard Chartered (STAN) 434.00p -3.99%
Anglo American (AAL) 525.70p -3.98%
Standard Life (SL.) 335.70p -3.87%
Shire Plc (SHP) 4,049.00p -3.60%
HSBC Holdings (HSBA) 417.50p -3.06%
Hargreaves Lansdown (HL.) 1,302.00p -2.91%
Antofagasta (ANTO) 432.70p -2.59%
Royal Bank of Scotland Group (RBS) 210.60p -2.55%

FTSE 250 - Risers

Electrocomponents (ECM) 266.00p 9.65%
Card Factory (CARD) 343.50p 4.25%
Softcat (SCT) 336.20p 3.80%
Ocado Group (OCDO) 337.70p 3.37%
Zoopla Property Group (WI) (ZPLA) 249.90p 3.18%
CLS Holdings (CLI) 1,488.00p 2.27%
Ibstock (IBST) 204.50p 2.20%
DFS Furniture (DFS) 318.50p 2.08%
Centamin (DI) (CEY) 91.00p 1.90%
Redrow (RDW) 408.90p 1.79%

FTSE 250 - Fallers

Aberdeen Asset Management (ADN) 261.60p -5.05%
Allied Minds (ALM) 431.50p -4.94%
Weir Group (WEIR) 1,023.00p -4.93%
AA (AA.) 250.10p -4.87%
Evraz (EVR) 86.80p -4.41%
International Personal Finance (IPF) 274.10p -4.29%
Brewin Dolphin Holdings (BRW) 268.40p -4.01%
Telecom Plus (TEP) 878.50p -3.94%
ICAP (IAP) 459.00p -3.59%
Man Group (EMG) 147.10p -3.48%