London close: Stocks fall after mixed economic data

London stocks fell on Monday as traders waded through mixed economic data, including weak China manufacturing reports.

The official purchasing managers’ index for China manufacturing fell to 49.7 in January from 49.7 the previous month, missing analysts’ expectations for a reading of 49.6 and below the 50 level that separates a contraction from an expansion in sector activity.

The private PMI from Caixin on China manufacturing also registered a contraction in January at 48.4. However it was better than December’s 48.2 and analysts’ estimates of 48.1.

“For an extended period economic data from Beijing has repeatedly followed a negative trajectory and this has compounded the growing concerns that capital outflows may accelerate as the economy continues to slow,” said FXTM research analyst Lukman Otununga.

“Sentiment towards the Chinese economy is heavily bearish and despite the People’s Bank of China (PBoC) pledging to maintain a prudent monetary policy in 2016, this visible deceleration may force the central bank to unleash aggressive monetary policy in a bid to revive growth.”

Oil prices also continued to provide a drag on markets, falling again on dimming prospects of a deal on a production cut by global oil producers to address the supply glut. Brent crude fell 4.1% to $34.55 per barrel and West Texas Intermediate dropped 5.2% to $31.95 per barrel 1631 GMT.

A better-than-expected report from Markit on UK manufacturing PMI failed to lift the mood. The PMI rose to 52.9 in January from 52.1 in December, beating forecasts for a reading of 51.6.

Markit's Eurozone manufacturing PMI was confirmed at 52.3 in January, as expected, up from December's 53.2.

Markit’s final US manufacturing PMI rose to 52.4, up a touch from December’s 38-month low of 51.2 but still the second-lowest reading since October 2013 and weaker than the flash estimate of 52.7. Analysts had forecast 52.6 in December.

ISM’s manufacturing data showed another contraction in sector activity. The index increased to 48.2 in January from 48.0 in December, but fell short of projections for a reading of 48.4.

Meanwhile, Bank of England data revealed that British mortgage approvals for house purchases rose to 70,837 in December from 70,424 in November, beating estimates of 69,600.

US construction spending nudged up 0.1% to $1.12trn in December compared with a downwardly-revised 0.6% decline the previous month, missing expectations for a 0.6% increase.

US personal spending was unchanged in December, missing expectations for a 0.1% increase and following November’s 0.4% gain, according to the Commerce Department. Personal income increased 0.3% in December, slightly higher than forecasts for 0.2% growth and after a 0.5% rise in November.

In company news, Prudential’s shares tumbled after announcing that Michael McLintock has decided to retire as chief executive of its subsidiary M&G Investments.

Royal Bank of Scotland slumped following a report in The Sunday Times that AIM-listed lender Secure Trust could make an audacious bid to buy the lender’s Williams & Glyn subsidiary.

BT Group gained after reporting a 3% increase in third quarter revenue to £4.59bn.

Ryanair flew higher after posting a jump in third quarter profit as traffic grew strongly and the budget airline announced a €800m share buyback programme.

InterContinental Hotels Group edged up following a report from The Sunday Times that it is preparing to return a £700m to shareholders via a share buyback after it missed out on a number of hotel deals.

Premier Oil surged after it resumed trading on Monday as the terms of its deal to buy the UK North Sea assets of German power company E.ON were amended so that it no longer constitutes a reverse takeover.

HSBC declined as a Reuters report said the bank has imposed a hiring and pay freeze across the bank globally in 2016 in an effort to cut costs.

Market Movers

FTSE 100 (UKX) 6,057.10 -0.44%
FTSE 250 (MCX) 16,489.98 0.01%
techMARK (TASX) 3,169.99 0.12%

FTSE 100 - Risers

easyJet (EZJ) 1,600.00p 3.36%
International Consolidated Airlines Group SA (CDI) (IAG) 555.50p 2.97%
Fresnillo (FRES) 739.00p 2.35%
InterContinental Hotels Group (IHG) 2,345.00p 2.09%
BT Group (BT.A) 494.20p 1.93%
ARM Holdings (ARM) 1,011.00p 1.81%
Barratt Developments (BDEV) 610.00p 1.75%
Randgold Resources Ltd. (RRS) 5,045.00p 1.57%
Persimmon (PSN) 2,066.00p 1.47%
Inmarsat (ISAT) 1,116.00p 1.45%

FTSE 100 - Fallers

Prudential (PRU) 1,326.50p -3.00%
BP (BP.) 366.30p -2.61%
Standard Chartered (STAN) 459.85p -2.37%
Lloyds Banking Group (LLOY) 64.19p -1.94%
Barclays (BARC) 182.80p -1.72%
Old Mutual (OML) 166.80p -1.71%
Glencore (GLEN) 87.99p -1.67%
HSBC Holdings (HSBA) 484.40p -1.60%
Royal Bank of Scotland Group (RBS) 248.70p -1.58%
Capita (CPI) 1,157.00p -1.53%

FTSE 250 - Risers

Home Retail Group (HOME) 152.90p 11.85%
Allied Minds (ALM) 305.00p 8.00%
UDG Healthcare Public Limited Company (UDG) 545.00p 4.01%
Card Factory (CARD) 360.70p 3.38%
Virgin Money Holdings (UK) (VM.) 326.30p 3.26%
Brewin Dolphin Holdings (BRW) 287.20p 3.12%
Acacia Mining (ACA) 212.60p 3.10%
AO World (AO.) 156.70p 3.09%
Lookers (LOOK) 162.60p 2.91%
Polymetal International (POLY) 590.50p 2.70%

FTSE 250 - Fallers

Evraz (EVR) 59.10p -5.21%
NMC Health (NMC) 920.00p -5.06%
IP Group (IPO) 177.80p -4.46%
Vedanta Resources (VED) 233.80p -4.22%
Just Eat (JE.) 358.00p -4.12%
Rathbone Brothers (RAT) 2,197.00p -2.79%
Jimmy Choo (CHOO) 135.20p -2.73%
Cobham (COB) 247.70p -2.48%
Euromoney Institutional Investor (ERM) 876.00p -2.45%
Electrocomponents (ECM) 204.00p -2.44%