London close: Stocks finish flat after mixed factory reports

UK equities finished broadly flat as investors sifted through a mixed batch of manufacturing reports.

The FTSE 100 rose 0.01% to 6,361.80 points at close of trading.

The China government’s purchasing mangers’ index on manufacturing showed a reading of 49.8 for October, unchanged from the previous month but below the 50 that was forecast. A level below 50 signals a contraction while a reading below that indicates expansion.

The Caixin’s PMI on manufacturing rose to 48.3 in October from 47.2 in September but marked the eighth successive month of contraction.

“The official PMI showed new export orders contracting for a 13th consecutive month which is consistent with the cooling global growth that we’ve been seeing but the more worrying thing is that the domestic economy isn’t doing enough to pick up the slack,” said Craig Erlam, senior market analyst at Oanda.

“The PBOC recently announced another batch of stimulus measures but with the data continuing to point to slower growth, more is likely to be needed.”

In contrast, growth in the UK manufacturing sector gained momentum in October. The Markit PMI rose from an upwardly revised 51.8 in September to a 16-month high of 55.5 last month, exceeding analysts’ expectations for a 51.3 reading.

“The revival provides a tentative suggestion that the manufacturers are pulling out of their recent funk, having been dogged by recession since the start of the year, and may help boost economic growth in the fourth quarter,” said Markit’s senior economist Rob Dobson.

Stateside, ISM’s index on manufacturing fell to its lowest level since May 2013 in October. The index fell to 50.1 from 50.2 in September, remaining marginally above analysts’ expectations for a 50 reading.

Markit’s US PMI on manufacturing, on the other hand, expanded at a slightly faster pace than expected in October to reach a six-month high. It rose from 54 in September to 54.1 last month, slightly above the flash reading of 54 that was initially reported.

Meanwhile, US construction spending rose 0.6% month-on-month in September, better than analysts’ forecasts for a 0.5% gain but slightly below the 0.7% increase that was recorded in August, the Commerce Department revealed.

Among corporate stocks, Hikma Pharmaceuticals slumped after saying its generics division is currently below its expectations due to slower-than-expected growth in colchicine sales. The group lowered full-year guidance for the generics business to revenues of around $150m, down from a previous range of $175m to $200m.

Compass Group headed south after Credit Suisse downgraded the catering company’s stock to ‘underperform’ from ‘neutral' and cut the target price to 1,050p from 1,100p.

EasyJet descended after HSBC downgraded the stock to ‘reduce’ from ‘hold’ and cut the target price to 1,600p from 1,800p.

Travis Perkins gained after Deutsche Bank upgraded the stock to ‘buy’ from ‘hold' and lifted the price target to 2,234p from 1,991p.

HSBC slid after reporting adjusted third quarter pre-tax profit that missed analysts’ expectations.

Other banks, including Barclays, Royal Bank of Scotland and Lloyds Banking Group, rallied as sentiment in the sector was lifted after Commerzbank said it will pay a dividend for the first time since 2007. Germany's positive reaction to Greek bank stress tests also provided financial stocks a boost.

Ryanair soared after posting a 37% rise in first-half profit after tax, saying full-year net profit will be towards the upper end of its guidance range and lifting its traffic target.

WPP climbed after strengthening its creative video offering with the acquisition of London design studio ManvsMachine.

Housebuilder Persimmon was under the cosh after JPMorgan Cazenove cut its stance on the shares to ‘underweight’ from ‘neutral’ as it took a look at UK housebuilders.

Mining stocks were under pressure on the back of China factory data, including Rio Tinto and Randgold Resources.

Market Movers

FTSE 100 (UKX) 6,362.02 0.01%
FTSE 250 (MCX) 17,161.80 0.26%
techMARK (TASX) 3,080.42 0.14%

FTSE 100 - Risers

Glencore (GLEN) 115.50p 2.67%
Ashtead Group (AHT) 1,020.00p 2.00%
Travis Perkins (TPK) 1,954.00p 1.98%
Barclays (BARC) 236.60p 1.98%
Royal Bank of Scotland Group (RBS) 323.30p 1.79%
Lloyds Banking Group (LLOY) 74.98p 1.70%
GKN (GKN) 291.80p 1.60%
CRH (CRH) 1,809.00p 1.57%
Marks & Spencer Group (MKS) 520.50p 1.46%
WPP (WPP) 1,477.00p 1.30%

FTSE 100 - Fallers

Hikma Pharmaceuticals (HIK) 2,056.00p -4.99%
Compass Group (CPG) 1,080.00p -3.49%
easyJet (EZJ) 1,713.00p -2.11%
TUI AG Reg Shs (DI) (TUI) 1,189.00p -1.65%
Whitbread (WTB) 4,884.00p -1.65%
Rio Tinto (RIO) 2,320.00p -1.63%
Randgold Resources Ltd. (RRS) 4,303.00p -1.49%
BHP Billiton (BLT) 1,026.50p -1.35%
Persimmon (PSN) 1,968.00p -1.30%
British American Tobacco (BATS) 3,815.50p -1.14%

FTSE 250 - Risers

Petra Diamonds Ltd.(DI) (PDL) 80.90p 8.37%
Serco Group (SRP) 99.75p 6.46%
Ophir Energy (OPHR) 100.60p 4.85%
Kaz Minerals (KAZ) 121.10p 4.31%
Premier Oil (PMO) 71.15p 3.87%
Indivior (INDV) 213.30p 3.75%
Just Eat (JE.) 440.00p 3.29%
National Express Group (NEX) 308.60p 3.07%
International Personal Finance (IPF) 381.40p 3.05%
Keller Group (KLR) 839.00p 2.88%

FTSE 250 - Fallers

Acacia Mining (ACA) 181.50p -5.96%
Pets at Home Group (PETS) 275.00p -4.68%
Millennium & Copthorne Hotels (MLC) 468.70p -2.70%
esure Group (ESUR) 258.40p -2.49%
TalkTalk Telecom Group (TALK) 248.00p -1.98%
Henderson Group (HGG) 281.60p -1.92%
SIG (SHI) 131.00p -1.87%
Hansteen Holdings (HSTN) 121.80p -1.85%
Daejan Holdings (DJAN) 6,230.00p -1.81%
Petrofac Ltd. (PFC) 828.00p -1.78%