London close: Stocks end lower after raft of economic data

The UK equity market ended lower on Friday as investors weighed a mix of economic data and earnings.

In the Eurozone, the unemployment rate fell to 10.8% in September from 10.9% in August while the consumer price index registered 0% year-on-year growth in October, up from a 0.1% decline the previous month.

Connor Campbell, financial analyst at Spreadex, said there was an “air of the bah-humbugs” despite the upbeat jobs and inflation data out in the Eurozone.

“Arguably the reason behind such a slip is that, whilst both figures are an improvement on last month, they aren’t good enough to justify their potentially ECB QE-injection delaying capacity,” he said.

Inflation remains well below the European Central Bank’s target of just below 2%, which has prompted President Mario Draghi to say the governing council will re-examine its €60bn monthly asset purchase programme at December’s policy meeting and consider extending it past September 2016.

Closer to home, GfK’s UK consumer confidence index fell to 2 in October from 4 in September, missing expectations for a reading of 3.

“While consumer confidence remains elevated in light of improved real wage growth, it appears that consumers are starting to feel less confident about the future owing to global economic worries, with anecdotal evidence from the GfK press release suggesting that ‘good news on the domestic front is being tempered by concerns about our ability to shrug off the global downturn’,” said Barclays Research. “This may be weighed on further as the impact of fiscal austerity is felt and inflation picks up at the start of 2016.”

In Asia, the Bank of Japan kept policy unchanged, despite cutting its economic and inflation forecasts. The central bank lowered its inflation estimate for the current fiscal year from 0.7% to 0.1% and its growth outlook by 0.5 percentage points to 1.2%.

Across the Atlantic, US consumer spending rose at the slowest pace since the turn of the year in September, according to figures released by the Commerce Department. Spending rose 0.1% month-on-month in September compared with a 0.4% increase in August and with analysts’ expectations for a 0.2% gain.

Meanwhile, personal income rose 0.1% month-on-month in September, the smallest gain since March and short of expectations of a 0.2% increase. August’s reading was revised up to show a 0.4% increase.

The Chicago purchasing managers' index rose to its highest level since the turn of the year in October. According to MNI Indicators, the index rose 56.2 from 48.7 in September compared with analysts' expectations for a 49.4 reading.

Consumer sentiment in the US declined in October, according to the latest University of Michigan reading. The index monitoring consumer sentiment slid to 90.0 from 92.1 in September, falling short of the 92.5 reading analyst had expected.

US employment cost rose in line with expectations in the third quarter, data showed. The employment cost index rose 0.6% in the three months between July and September, compared with a 0.2% gain in the previous quarter.

In company news, Royal Bank of Scotland declined after reporting a drop in pre-tax profit in the third quarter to o £295m from £3.2bn the previous year due to higher restructuring costs.

International Consolidated Airlines flew lower despite reporting a jump in third quarter profit. Societe Generale said a negative share price reaction was likely given the strong performance of the stock, which is up 22%year-to-date.

Meggitt bounced back after the aerospace and defence company suffered two days of heavy losses on the back of a profit warning. On Wednesday, the group cautioned that profit for the full year will be well below forecasts after it endured softer trading during the third quarter, with a “marked deterioration” in its end markets in September.

Barclays was on the back foot again after posting disappointing third-quarter results in the previous session.

Vectura Group rallied after the company said it had triggered two milestone payments following an approval of an inhaler in the US and also reaching a development milestone in Europe.

Shares in speciality chemicals group Elementis were also on the march as the company said positive trends in the first half would continue into the full year and help earnings meet expectations, despite a sales slowdown.

Pets at Home shares dipped as a cooler summer lowered demand for tic and flea treatments with sales hit as a result. Same store sales growth fell to 1.8% for the 28 weeks to 8 October from 4.2% last year.

Cineworld shares plunged after analysts at Canaccord Genuity downgraded the stock to ‘sell’ saying it was time to take profits.

Market Movers

FTSE 100 (UKX) 6,342.26 -0.84%
FTSE 250 (MCX) 17,085.00 -0.17%
techMARK (TASX) 3,072.12 -0.38%

FTSE 100 - Risers

Taylor Wimpey (TW.) 197.20p 1.75%
Anglo American (AAL) 545.80p 1.64%
Glencore (GLEN) 112.50p 1.53%
Meggitt (MGGT) 351.40p 1.18%
Wolseley (WOS) 3,800.00p 1.12%
Sports Direct International (SPD) 694.00p 1.02%
Bunzl (BNZL) 1,851.00p 0.93%
Smith & Nephew (SN.) 1,106.00p 0.91%
InterContinental Hotels Group (IHG) 2,589.00p 0.90%
Intertek Group (ITRK) 2,618.00p 0.89%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 579.00p -3.10%
Barclays (BARC) 231.10p -2.59%
Morrison (Wm) Supermarkets (MRW) 167.80p -2.16%
Randgold Resources Ltd. (RRS) 4,354.00p -2.14%
Shire Plc (SHP) 4,911.00p -1.74%
Unilever (ULVR) 2,887.00p -1.67%
Pearson (PSON) 861.00p -1.66%
BP (BP.) 385.25p -1.65%
Royal Mail (RMG) 443.90p -1.64%
Hammerson (HMSO) 633.50p -1.63%

FTSE 250 - Risers

Vectura Group (VEC) 173.50p 5.86%
Ophir Energy (OPHR) 96.20p 5.60%
SIG (SHI) 132.30p 4.58%
Evraz (EVR) 84.65p 4.51%
TalkTalk Telecom Group (TALK) 252.10p 4.43%
Home Retail Group (HOME) 112.30p 4.17%
Elementis (ELM) 234.10p 3.86%
National Express Group (NEX) 299.30p 3.56%
Lookers (LOOK) 174.90p 3.49%
Petra Diamonds Ltd.(DI) (PDL) 74.30p 3.05%

FTSE 250 - Fallers

Pets at Home Group (PETS) 287.60p -7.58%
Cineworld Group (CINE) 550.00p -7.41%
Acacia Mining (ACA) 192.20p -3.90%
Zoopla Property Group (WI) (ZPLA) 242.20p -3.31%
Jardine Lloyd Thompson Group (JLT) 945.00p -2.78%
Supergroup (SGP) 1,454.00p -2.74%
Indivior (INDV) 204.50p -2.62%
BTG (BTG) 552.00p -2.30%
Playtech (PTEC) 853.50p -2.23%
Shawbrook Group (SHAW) 338.00p -2.14%