London midday: FTSE drops as miners fall on downbeat Chinese manufacturing data

The FTSE 100 declined at Monday midday, led by miners following the release of lacklustre Chinese manufacturing data.

Rio Tinto, Randgold Resources, BHP Billiton and Anglo American were among the fallers as commodity prices took a hit after two separate surveys showed Chinese manufacturing activity slowed in July.

The Caixin purchasing managers' index, 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. A level below 50 indicates a contraction in activity while a level above that signals expansion.

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

"Of course, this had a knock on effect for the FTSE, which looked a bit lifeless after the bell, hovering around 6700 but without showing much intention either up or down,” said Connor Campbell, financial analyst at Spreadex.

Lower oil prices also affected shares, with Brent crude down 2.1% to $51.11 per barrel at 1203 BST.

Weighing on the market elsewhere, investors continued to dwell on weak US data on wages and consumer confidence on Friday which saw stocks in the world’s biggest economy close lower. Later on, the US will be hoping to redeem itself from Friday's slump with the release of data on personal consumption expenditure and ISM manufacturing.

A better-than-expected report on UK manufacturing did little to uplift stocks. The Markit/CIPS manufacturing purchasing managers’ index 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 consumers 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.”

Meanwhile, Greece remained in focus as the Athens stock market opened lower after the economic sentiment index dropped to 81.3 in July from 90.7 month earlier, according to the Institute for Economic and Industrial Research. It marked the lowest reading since October 2012, signalling that concerns for the debt-ridden nation have shown no signs of letting up.

Company news

HSBC dominated the headlines after saying first half profits were up by 10%, beating analysis' expectations. The bank’s shares rose as it said earnings were driven by a strong performance in Asia.

CRH dropped as it announced it has reached an agreement to acquire certain assets from Lafarge-Holcim for a total enterprise value of €6.5bn.

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.

BG Group gained after saying it has generated first oil from the Cidade de Itaguaí floating, production, storage and offloading vessel in the Santos Basin, offshore Brazil.

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.