London close: Stocks decline as weak UK manufacturing activity persists

The FTSE 100 closed in the red on Monday after a survey showed continued weakness in UK manufacturing sector activity.

According to the CBI Industrial Trends survey, UK manufacturing sector activity remained stuck in the doldrums in March with factory output falling at the fastest pace in more than six years.

A survey of total order books in March found a negative balance of -14%, with 34% of businesses revealing order books were below normal and 20% reporting they were above normal. This balance compares to the -17% in February and -15% in January.

"There are some positives for manufacturers – notably sterling’s recent appreciable overall softening as well as still pretty low oil and commodity prices, which support their ability to price competitively to try and gain business," said Howard Archer," chief UK and European economist at IHS Global Insight.

"However, while the recent overall marked weakening of the pound and still low oil and commodity prices are welcome news for UK manufacturers, they will be concerned by current ongoing muted global economic activity and an uncertain outlook."

In other UK data, a report from Rightmove showed the average house price in England and Wales passed an average of £300,000 for the first time in March. Driven by increases in central, South West and North East England, the average asking price for homes rose 7.6% year-on-year to £303,190 this month from £299,287 in February.

In commodities, oil prices rebounded from lows earlier in the session with Brent crude rising 0.41% to $41.37 per barrel and West Texas Intermediate increasing 0.70% to $41.43 per barrel at 1642 GMT.

Data from driller Baker Hughes on Friday showed US energy companies last week added one oil rig to 387 following three months of cuts, which sent oil prices tumbling.

Investors were also digesting a report from the National Association of Realtors on Monday which showed US existing home sales fell 7.1% in February to 5.08m units, the lowest since November.

Meanwhile, Richmond Fed President Jeffrey Lacker said in a speech that the latest US inflation figures were stronger than expected and expressed confidence that inflation will hit the Fed’s 2% target.

On the corporate front, the London Stock Exchange plunged after it completed its first daily intra-day auction at noon on Monday. It gave a two-minute pause in trading of the largest shares on the exchange to allow investors to enter, modify and delete orders without automated trading.

Sainsbury’s jumped after it was given the all-clear to buy Argos-owner Home Retail for £1.4bn after the market closed last Friday.

Centamin was under the cosh after reporting a fall in full year profits due to a weaker gold price.

Synthomer rallied after announcing the $226m (£156m) acquisition of Hexion Performance Adhesives & Coatings.

Market Movers

FTSE 100 (UKX) 6,184.76 -0.08%
FTSE 250 (MCX) 16,864.37 -0.22%
techMARK (TASX) 3,077.34 0.12%

FTSE 100 - Risers

Shire Plc (SHP) 3,842.00p 4.09%
Paddy Power Betfair (PPB) 9,020.00p 1.75%
Tesco (TSCO) 197.45p 1.33%
Pearson (PSON) 906.00p 1.29%
Worldpay Group (WI) (WPG) 276.90p 1.28%
Sainsbury (J) (SBRY) 276.50p 1.21%
Severn Trent (SVT) 2,163.00p 1.03%
InterContinental Hotels Group (IHG) 2,818.00p 0.75%
Reckitt Benckiser Group (RB.) 6,649.00p 0.74%
United Utilities Group (UU.) 922.00p 0.71%

FTSE 100 - Fallers

Antofagasta (ANTO) 495.50p -3.69%
London Stock Exchange Group (LSE) 2,814.00p -2.70%
TUI AG Reg Shs (DI) (TUI) 1,001.00p -2.34%
Aviva (AV.) 475.20p -2.30%
Rolls-Royce Holdings (RR.) 702.50p -1.95%
Old Mutual (OML) 192.90p -1.88%
BHP Billiton (BLT) 819.50p -1.35%
ITV (ITV) 240.90p -1.27%
GKN (GKN) 288.90p -1.26%
International Consolidated Airlines Group SA (CDI) (IAG) 558.00p -1.24%

FTSE 250 - Risers

Synthomer (SYNT) 345.20p 5.63%
McCarthy & Stone (MCS) 249.30p 5.19%
Allied Minds (ALM) 434.50p 4.62%
Vedanta Resources (VED) 322.50p 4.03%
Dechra Pharmaceuticals (DPH) 1,230.00p 3.80%
Fidelity China Special Situations (FCSS) 132.10p 3.36%
Kaz Minerals (KAZ) 185.70p 3.17%
Interserve (IRV) 460.90p 2.99%
Cable & Wireless Communications (CWC) 76.20p 2.83%
Softcat (SCT) 309.50p 2.65%

FTSE 250 - Fallers

Brown (N.) Group (BWNG) 337.90p -6.14%
Halfords Group (HFD) 400.90p -5.34%
Polypipe Group (PLP) 333.40p -4.88%
Mitie Group (MTO) 267.00p -4.06%
Thomas Cook Group (TCG) 92.50p -3.95%
Supergroup (SGP) 1,425.00p -3.91%
Centamin (DI) (CEY) 89.25p -3.57%
Drax Group (DRX) 267.10p -3.40%
Meggitt (MGGT) 404.10p -3.23%
Ocado Group (OCDO) 288.70p -2.96%