London midday: UK stocks slip on mixed data as markets await Autumn Statement

UK stocks slipped on Wednesday as investors digested a flurry of economic data and awaited the Autumn Statement.

The FTSE 100 was trading 0.2% lower at 6,729 by midday.

Stocks had finished strongly on Tuesday, bouncing back after a heavy fall the previous session, with shares in the resource sectors rebounding on hopes of stimulus in Europe and China.

Speculation about a possible merger between oil majors BP and Shell also boosted the two heavyweight stocks in London, pushing the FTSE 100 to 6,742.10, its highest close since 21 November.

As for Wednesday's session, investors were waiting to see what Chancellor George Osborne has in store in his Autumn Statement at 12:30. Nevertheless, many analysts were predicting it will be seen as a political rather than an economic event.

"One reason for this could be that many of the measures announced by the Chancellor tend to be leaked in the days and weeks before the event leaving very few surprises on the day, especially ones of any real significance," explained analyst Craig Erlam from Alpari UK.

In economic data, the UK services purchasing managers' index (PMI) rose to 58.6 in November from 56.2 in October, well ahead of the 56.5 forecast by analysts. Chris Williamson, chief economist at Markit, added: “Faster growth of services activity brings welcome news that fears of a potentially sharp slowdown in the economy look overplayed."

Two separate surveys from China overnight showed that growth in the services sector picked up in November, with both the non-official HSBC China non-manufacturing PMI and the government's non-manufacturing PMI rising to 53 and 53.9, respectively. However, ongoing weakness in the manufacturing sector meant that the HSBC China composite PMI fell from 51.7 to 51.1.

Data from Europe also came in weak, with the Eurozone composite PMI being revised down to 51.1 for November, from the initial reading of 51.4, as the service sector grew less than previously expected. Eurozone retail sales also rose 0.4% in October, less than the 0.5% expected by the market.

The service-sector PMI in the States will also be in focus on Wednesday, along with the ADP employment report as it comes ahead of the all-important non-farm payrolls data on Friday. Speeches from various members of the Federal Reserve and the central bank's Beige Book were also scheduled for Wednesday evening.

Sage jumps, oil stocks pull back

Accountancy software group Sage was a high riser after it hailed higher annual profits and the achievement of key financial milestones for 2014. The company also said it was on track to hit financial targets for 2015.

Stocks in the oil sector were pulling back after a solid rise the previous session, with Tullow and BG Group both recording losses. Barclays said in research note that producers across Europe can expect a "material squeeze" in cash flows and earnings next year because of the recent slump in oil prices, as it reduced its 2015 earnings estimates for the sector by an average 20%.

Shares in BP and Shell also retreated after advancing on Tuesday on the back of reports that Shell could launch a takeover bid for its smaller rival. "Such a merger would be a brave move at a time of heightened uncertainty," said analyst Chris Beauchamp from IG, with oil prices currently near their lowest in over four years.

Just Eat, the online takeaway delivery service, dropped sharply after a group of shareholders behind its initial public offering earlier in the year raised £139m by selling a 7.7% stake. The 43.5m shares were sold at a price of 320p, compared with Tuesday's close of 343.05p.

Postal group Royal Mail was also trading in the red after both Credit Suisse and Jefferies reiterated their 'underperform' ratings on the stock.

Investec slashed its target for the share price of industrial engineering group Weir by 17%, causing shares to fall. The broker reiterated its 'sell' rating on the stock, saying that almost every important data point for the company is "trending negatively".

Market Movers
techMARK 2,945.83 +0.23%
FTSE 100 6,728.75 -0.20%
FTSE 250 15,825.21 -0.05%

FTSE 100 - Risers
Sage Group (SGE) 422.70p +4.84%
Sports Direct International (SPD) 693.00p +3.05%
3i Group (III) 451.20p +2.08%
Admiral Group (ADM) 1,274.00p +2.08%
Aviva (AV.) 506.50p +1.30%
Friends Life Group Limited (FLG) 379.70p +1.23%
Rio Tinto (RIO) 3,009.00p +1.07%
ITV (ITV) 216.90p +1.07%
easyJet (EZJ) 1,645.00p +1.04%
Standard Chartered (STAN) 949.80p +1.01%

FTSE 100 - Fallers
Royal Dutch Shell 'B' (RDSB) 2,249.50p -1.85%
Royal Dutch Shell 'A' (RDSA) 2,168.00p -1.81%
Royal Mail (RMG) 399.90p -1.38%
Reckitt Benckiser Group (RB.) 5,190.00p -1.14%
Capita (CPI) 1,056.00p -1.12%
Hargreaves Lansdown (HL.) 978.50p -1.11%
Weir Group (WEIR) 1,807.00p -1.09%
Vodafone Group (VOD) 227.65p -1.00%
BT Group (BT.A) 413.80p -0.98%
Petrofac Ltd. (PFC) 804.50p -0.98%

FTSE 250 - Risers
EnQuest (ENQ) 48.22p +11.52%
Northgate (NTG) 549.00p +3.10%
Bank of Georgia Holdings (BGEO) 2,200.00p +2.71%
ICAP (IAP) 423.80p +2.69%
Acacia Mining (ACA) 247.60p +2.48%
Fisher (James) & Sons (FSJ) 1,065.00p +2.40%
Aveva Group (AVV) 1,415.00p +2.31%
Centamin (DI) (CEY) 47.78p +2.16%
Merlin Entertainments (MERL) 388.90p +1.94%
Brewin Dolphin Holdings (BRW) 284.20p +1.94%

FTSE 250 - Fallers
Just Eat (JE.) 310.00p -8.61%
Hunting (HTG) 574.50p -2.96%
Infinis Energy (INFI) 222.00p -2.63%
Home Retail Group (HOME) 193.00p -2.38%
Victrex plc (VCT) 1,773.00p -2.31%
TSB Banking Group (TSB) 264.00p -2.26%
Brit (BRIT) 247.60p -1.75%
Barratt Developments (BDEV) 443.50p -1.66%
Poundland Group (PLND) 309.80p -1.65%
Ophir Energy (OPHR) 141.70p -1.60%