London close: Weak China and US PMIs send FTSE lower

Worse-than-expected manufacturing data in the US and China sent the FTSE lower at close on Monday.

China’s Caixin purchasing managers' index (PMI) on manufacturing activity, which was previously sponsored by HSBC, declined to a two-year low of 47.7 from June's 49.4 on a 100-point scale. Analysts had been expecting a reading of 48.3. A level below 50 indicates a contraction in activity while a level above that signals expansion.

Another index by Chinese industry group, the Federation of Logistics & Purchasing, and the government statistics bureau dipped to 50 from June's 50.2.

The reports fuelled concerns about the slowdown in China and pushed mining stocks lower. Rio Tinto, Randgold Resources, BHP Billiton and Anglo American were among the fallers as commodity prices dropped following the manufacturing reports.

The US was also left disappointed after ISM’s PMI on manufacturing fell to 52.7 in July from 53.5 a month earlier, compared with forecasts of 53.5.

A drop in oil prices also affected the market, with Brent crude down 3.0% to $50.66 per barrel at 1203 BST.

Better-than-forecast reports on UK manufacturing and US personal consumption expenditure failed to offset the negative data.

The Markit/CIPS UK manufacturing PMI printed at 51.9, up from a 26-month low of 51.4 in June and a little stronger than the 51.6 analysts had expected.

“Even though overall confidence remains weak and mostly driven by consumer goods, the July rebound reassures us,” according to Barclays Research analysts. “We are now looking for confidence in manufacturing to stabilise after deteriorating steadily since the cyclical highs reached in 2013.”

US personal consumption core expenditure rose 1.3% in June, beating estimates for a 1.2% rise.

Meanwhile, Greece remained in focus as the Athens stock market opened at a record low following a fall in the economic sentiment index and manufacturing PMI. Greece and its creditors have agreed that new pension reforms will not have any impact on anyone who was eligible to retire by the end of June, Reuters reported. The government will implement pension reforms including raising the retirement age limit by the end of October. It is also reportedly unlikely to ask for an increase in emergency funding from the European Central Bank for weeks as its liquidity buffer has risen due to cash inflows and help from the central bank.

Company news

HSBC jumped after saying first half profits were up by 10%, beating analysis' expectations. The bank said earnings were driven by a strong performance in Asia.

Intertek was higher after posting a rise in first-half pre-tax profit on the back of improved revenue momentum, margin progression and strong cash generation. Pre-tax profit was up 16.1% at 139.1m from £119.8m last year, while revenue grew 3.5% to £1.06bn from £1.02bn.

Home Retail Group dipped after Deutsche Bank downgraded the stock to ‘hold’ from ‘buy’ and cut its price target to 160p from 220p. The bank pointed out that it’s been a particularly challenging 2015 for Home shares, which have underperformed the sector.

Rolls-Royce rose sharply, extending gains that began on Friday after it emerged that US hedge fund ValueAct has built a 5.4% stake in the aerospace and defence company.

RSA Insurance was also on the front foot following weekend press reports that the company’s board is looking for a 600p per share bid from Zurich Insurance and that the it will look to present a strong case for the group at first-half results on 6 August.

Market Movers
techMARK 3,203.61 -0.15%
FTSE 100 6,688.62 -0.11%
FTSE 250 17,651.79 -0.14%

FTSE 100 - Risers
Intertek Group (ITRK) 2,721.00p +11.20%
Rolls-Royce Holdings (RR.) 841.00p +5.92%
International Consolidated Airlines Group SA (CDI) (IAG) 551.00p +3.18%
SABMiller (SAB) 3,454.00p +2.66%
Smiths Group (SMIN) 1,149.00p +1.77%
RSA Insurance Group (RSA) 523.00p +1.75%
easyJet (EZJ) 1,668.00p +1.46%
Inmarsat (ISAT) 900.00p +1.35%
Unilever (ULVR) 2,940.00p +1.14%
BT Group (BT.A) 469.20p +1.02%

FTSE 100 - Fallers
Anglo American (AAL) 779.00p -3.97%
BHP Billiton (BLT) 1,137.00p -3.85%
Glencore (GLEN) 200.35p -3.68%
Rio Tinto (RIO) 2,432.50p -2.17%
Fresnillo (FRES) 633.00p -2.16%
Weir Group (WEIR) 1,506.00p -2.02%
Randgold Resources Ltd. (RRS) 3,786.00p -1.97%
Tesco (TSCO) 211.60p -1.90%
Carnival (CCL) 3,492.00p -1.69%
Ashtead Group (AHT) 965.00p -1.68%

FTSE 250 - Risers
OneSavings Bank (OSB) 301.90p +3.75%
Foxtons Group (FOXT) 252.00p +3.28%
Poundland Group (PLND) 347.00p +2.91%
Virgin Money Holdings (UK) (VM.) 436.60p +2.73%
Man Group (EMG) 166.70p +2.33%
TalkTalk Telecom Group (TALK) 307.70p +2.09%
AO World (AO.) 127.10p +2.09%
Tullett Prebon (TLPR) 413.00p +1.85%
Dairy Crest Group (DCG) 588.00p +1.73%
Ultra Electronics Holdings (ULE) 1,775.00p +1.72%

FTSE 250 - Fallers
Fidessa Group (FDSA) 2,005.00p -16.46%
Lonmin (LMI) 49.00p -6.04%
Kaz Minerals (KAZ) 153.10p -5.44%
Premier Oil (PMO) 127.90p -4.48%
Vedanta Resources (VED) 382.40p -4.23%
Polymetal International (POLY) 434.30p -4.13%
Acacia Mining (ACA) 232.00p -3.37%
Hunting (HTG) 498.60p -2.90%
Ladbrokes (LAD) 110.70p -2.81%
Nostrum Oil & Gas (NOG) 504.00p -2.70%

FTSE TechMARK - Risers
RM (RM.) 174.12p +2.43%
Ricardo (RCDO) 915.00p +1.67%
Innovation Group (TIG) 32.75p +1.55%
BATM Advanced Communications Ltd. (BVC) 16.75p +1.52%
XP Power Ltd. (DI) (XPP) 1,667.50p +1.43%
Spirent Communications (SPT) 94.50p +1.07%
Triad Group (TRD) 27.25p +0.93%
Skyepharma (SKP) 282.00p +0.71%
Sarossa (SARS) 1.83p +0.55%
Oxford Instruments (OXIG) 920.00p +0.44%

FTSE TechMARK - Fallers
Oxford Biomedica (OXB) 8.96p -3.03%
Consort Medical (CSRT) 917.00p -1.71%
NCC Group (NCC) 234.00p -0.64%
Sepura (SEPU) 155.00p -0.64%
SDL (SDL) 400.50p -0.25%
Anite (AIE) 125.50p -0.20%
Torotrak (TRK) 6.89p -0.14%