London close: Stocks rise after 'robust' UK construction PMI

London stocks edged higher as a report revealed growth in the UK construction sector activity in October.

The Markit/CIPS construction purchasing managers’ index declined from 59.9 in September to 58.8 last month, but comfortably above the 50 threshold that signals expansion and in line with analysts’ expectations.

Housing activity growth eased from September’s 12-month high and the latest rise in civil engineering was the slowest since May, while commercial building work increased at the sharpest pace for eight months.

“This is still a largely robust survey, despite the headline construction activity index edging back in October from a seven-month high in September,” said Howard Archer, chief UK and European economist at IHS Global Insight.

“In fact, the headline activity index was still at a high level in October that is consistent with strong construction expansion.”

The report follows Monday’s impressive UK manufacturing PMI which 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 Bank of England is closely monitoring UK data ahead of Thursday’s policy decision. Analysts expect no change to interest rates or the asset purchase programme amid low inflation and risks stemming from the slowdown in emerging markets.

Stateside, US factory orders fell 1% in September more than the 0.9% drop that was expected by analysts, according to the Commerce Department. Orders decreased a revised 2.1% in August.

“Given the relatively small revisions to durable goods data, this morning’s report provides little new signal on the state of US manufacturing,” according to Barclays Research analysts. “Demand for many categories of manufactured goods continues to struggle from the effect of a stronger dollar, weak foreign demand and lower energy prices.”

In company news, Standard Chartered slumped after posting a disappointing third quarter and launching a capital raise to strengthen the balance sheet and support its strategic review.

Housebuilders Barratt Developments, Persimmon and Taylor Wimpey declined after Liberum cut its rating on the stocks to ‘sell’ from ‘hold’, saying valuations are “too optimistic to accommodate margin pressure”.

Shire dropped following Monday’s news it agreed to the $5.9bn acquisition of US-based biotech Dyax Corporation.

Meggitt jumped after Barclays reiterated its ‘overweight’ rating on the shares, saying the stock was “too cheap to ignore”.

Royal Dutch Shell climbed as it announced it will accelerate the implementation of measures to deal with a prolonged downturn in oil prices once the acquisition of BG Group is complete. BG also rallied on the news.

Imperial Tobacco increased as it posted a rise in pre-tax profit and underlying tobacco net revenue for the year ended 30 September and said it was well placed to meet expectations for the coming year, despite a drop in overall revenues.

BP, Tullow Oil and Premier Oil were on the front foot as Brent crude rose 1.9% to $49.77 per barrel and West Texas Intermediate increased 2.2% to $47.22 per barrel at 1647 GMT.

Market Movers

FTSE 100 (UKX) 6,374.25 0.20%
FTSE 250 (MCX) 17,172.76 0.03%
techMARK (TASX) 3,075.89 -0.15%

FTSE 100 - Risers

Meggitt (MGGT) 373.40p 4.56%
BP (BP.) 403.25p 3.86%
Glencore (GLEN) 119.45p 3.33%
Anglo American (AAL) 561.90p 3.23%
BHP Billiton (BLT) 1,058.50p 3.17%
Aberdeen Asset Management (ADN) 355.90p 3.01%
Royal Dutch Shell 'A' (RDSA) 1,757.50p 2.96%
Royal Dutch Shell 'B' (RDSB) 1,761.50p 2.77%
BG Group (BG.) 1,057.00p 2.72%
Antofagasta (ANTO) 535.00p 2.49%

FTSE 100 - Fallers

Standard Chartered (STAN) 666.00p -6.67%
Taylor Wimpey (TW.) 187.80p -5.25%
Barratt Developments (BDEV) 585.00p -4.10%
Shire Plc (SHP) 4,715.00p -3.48%
Berkeley Group Holdings (The) (BKG) 3,197.00p -3.27%
Carnival (CCL) 3,499.00p -2.67%
Persimmon (PSN) 1,921.00p -2.39%
TUI AG Reg Shs (DI) (TUI) 1,165.00p -1.94%
United Utilities Group (UU.) 965.00p -1.88%
Kingfisher (KGF) 348.90p -1.86%

FTSE 250 - Risers

Tullow Oil (TLW) 235.20p 17.42%
Premier Oil (PMO) 81.40p 14.17%
Weir Group (WEIR) 1,140.00p 6.05%
Evraz (EVR) 88.45p 5.05%
Stagecoach Group (SGC) 369.00p 4.44%
Cairn Energy (CNE) 157.70p 4.16%
Keller Group (KLR) 874.00p 3.80%
Supergroup (SGP) 1,494.00p 3.75%
Laird (LRD) 354.00p 3.36%
Rotork (ROR) 194.60p 2.96%

FTSE 250 - Fallers

Clarkson (CKN) 2,128.00p -11.63%
Jardine Lloyd Thompson Group (JLT) 888.00p -7.60%
Indivior (INDV) 199.20p -6.70%
Redrow (RDW) 440.20p -6.58%
Tullett Prebon (TLPR) 329.20p -6.32%
Moneysupermarket.com Group (MONY) 319.60p -4.74%
Crest Nicholson Holdings (CRST) 530.50p -3.89%
Bovis Homes Group (BVS) 987.50p -3.85%
Bellway (BWY) 2,526.00p -2.81%
Domino's Pizza Group (DOM) 1,059.00p -2.40%