London midday: China PMIs drag stocks lower

The London stock market retreated on Monday as weak Chinese manufacturing reports offset better-than-forecast UK factory data.

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.

The US will also see the release of manufacturing data in afternoon trade on Monday along with construction spending figures.

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

Royal Dutch Shell was in the red after completing the sale of its Butagaz liquefied petroleum gas business in France to DCC Energy for €464m following the announcement in May.

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.

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.

Market Movers

FTSE 100 (UKX) 6,344.51 -0.26%
FTSE 250 (MCX) 17,139.78 0.13%
techMARK (TASX) 3,075.83 -0.01%

FTSE 100 - Risers

Travis Perkins (TPK) 1,953.00p 1.93%
Ashtead Group (AHT) 1,018.00p 1.80%
ITV (ITV) 255.60p 1.27%
Marks & Spencer Group (MKS) 519.50p 1.27%
Lloyds Banking Group (LLOY) 74.64p 1.23%
Barclays (BARC) 234.60p 1.12%
BAE Systems (BA.) 445.10p 1.09%
Admiral Group (ADM) 1,629.00p 0.99%
WPP (WPP) 1,472.00p 0.96%
Taylor Wimpey (TW.) 199.90p 0.96%

FTSE 100 - Fallers

Hikma Pharmaceuticals (HIK) 2,054.00p -5.08%
Compass Group (CPG) 1,085.00p -3.04%
easyJet (EZJ) 1,702.00p -2.74%
Anglo American (AAL) 533.60p -2.38%
Standard Chartered (STAN) 708.70p -1.76%
Antofagasta (ANTO) 518.50p -1.52%
Randgold Resources Ltd. (RRS) 4,303.00p -1.49%
BHP Billiton (BLT) 1,025.50p -1.44%
Rio Tinto (RIO) 2,324.50p -1.44%
HSBC Holdings (HSBA) 501.90p -1.12%

FTSE 250 - Risers

Serco Group (SRP) 97.40p 3.95%
Petra Diamonds Ltd.(DI) (PDL) 77.00p 3.15%
National Express Group (NEX) 308.20p 2.94%
International Personal Finance (IPF) 380.10p 2.70%
Riverstone Energy Limited (RSE) 839.00p 2.32%
Crest Nicholson Holdings (CRST) 556.50p 2.30%
FirstGroup (FGP) 98.60p 1.91%
Playtech (PTEC) 871.50p 1.81%
Kaz Minerals (KAZ) 118.00p 1.64%
PayPoint (PAY) 1,006.00p 1.62%

FTSE 250 - Fallers

Tullow Oil (TLW) 196.50p -3.15%
SIG (SHI) 129.80p -2.77%
Acacia Mining (ACA) 188.00p -2.59%
Pets at Home Group (PETS) 281.50p -2.43%
TalkTalk Telecom Group (TALK) 247.50p -2.17%
Henderson Group (HGG) 280.90p -2.16%
Debenhams (DEB) 87.70p -1.96%
Just Retirement Group (JRG) 163.00p -1.57%
BTG (BTG) 543.50p -1.54%
Saga (SAGA) 204.70p -1.40%