London midday: Mining stocks drag FTSE lower

UK equities edged lower on Friday with mining shares leading the declines as investors weighed worse-than-expected Eurozone manufacturing data.

Rio Tinto, Anglo American, Glencore and Antofagasta were the biggest fallers on the FTSE 100 in midday trade.

“It is somewhat unclear what has caused this mining-reversal; the manufacturing softness form the Eurozone may have contributed, ditto yesterday’s shareholder revolt over Anglo American CEO Mark Cutifani’s pay,” said Connor Campbell, financial analyst at Spreadex.

“Regardless of what the is the cause the sector’s sluggish performance is preventing the FTSE from ending the week on the 2016 highs struck over the last couple of days.”

Anglo American shareholders voted against a lucrative pay package for the company’s boss Mark Cutifani on Thursday amid concerns about the decline in the miner’s share price in the past year as commodity prices fall.

Meanwhile, Markit’s purchasing managers’ index on Eurozone manufacturing fell to 51.5 in April from 51.6 in March, missing forecasts of 51.9. A reading above 50 signals an expansion in sector activity while a level below that indicates a contraction.

The PMI on Eurozone services also fell short of estimates, rising to 53.2 in April from 53.1 in March, instead of the 53.3 that was expected by analysts.

Elsewhere in the bloc, Greece is holding talks with international lenders on Friday in the hopes of unlocking further debt relief but eurozone officials said they are unlikely to reach an agreement yet despite making progress on reforms.

The chairman of eurozone finance ministers, Jeroen Disselbloem told reporters “don’t expect any deals today” as discussions on debt had only just begun.

"If we make progress on the content of the programme and the next steps then we need to start the discussion on debt,” he said.

Across the Atlantic, Markit’s US manufacturing PMI is due at 1445 BST with analysts expecting an increase to 52 in April from 51.5 in March.

In commodities, oil prices headed for a third straight week of gains as market sentiment improved.

At 1142 BST, Brent crude rose 0.22% to $44.54 per barrel and West Texas Intermediate climbed 0.23% to $43.28 per barrel.

In company news, housebuilders rallied, including Berkeley Group, Barratt Developments, Travis Perkins and Persimmon. Canaccord Genuity said in a note to investors that UK housebuilders were expected to enjoy “steady volume growth” going forward despite a downgrade to forecasts of 2016 construction output by Experian.

“With strong order books they appear well placed to weather any short-term slowdown ahead of the Brexit vote,” the broker said.

Hammerson was in the red after the property development and investment company signed a £420m unsecured revolving credit facility with eight international banks, at an initial margin of 90 basis points.

Saga gained after its main shareholder and former private equity owner Acromas sold off its last remaining shares overnight, with chairman Andrew Goodsell taking the opportunity to buy £5m of stock.

Cerillion jumped after the billing software group said full year results are anticipated to be in line with management expectations, with revenues of around £6.9m and earnings before interest, tax, depreciation and amortisation of £1.1m, an increase of 11% and 21% respectively.

Market Movers

FTSE 100 (UKX) 6,337.79 -0.68%
FTSE 250 (MCX) 16,983.16 0.02%
techMARK (TASX) 3,145.13 -0.26%

FTSE 100 - Risers

Persimmon (PSN) 1,922.00p 2.13%
Barratt Developments (BDEV) 520.50p 2.06%
Sainsbury (J) (SBRY) 294.30p 1.90%
Tesco (TSCO) 188.45p 1.86%
Berkeley Group Holdings (The) (BKG) 2,945.00p 1.83%
Ashtead Group (AHT) 906.00p 1.68%
Travis Perkins (TPK) 1,836.00p 1.66%
Whitbread (WTB) 3,934.00p 1.37%
Taylor Wimpey (TW.) 179.00p 1.24%
Morrison (Wm) Supermarkets (MRW) 192.70p 0.78%

FTSE 100 - Fallers

Anglo American (AAL) 719.50p -3.72%
Rio Tinto (RIO) 2,330.00p -3.10%
Antofagasta (ANTO) 471.20p -3.07%
Glencore (GLEN) 161.90p -2.91%
Royal Dutch Shell 'B' (RDSB) 1,808.00p -1.93%
Royal Dutch Shell 'A' (RDSA) 1,799.00p -1.83%
GKN (GKN) 294.70p -1.73%
Land Securities Group (LAND) 1,089.00p -1.71%
BP (BP.) 362.40p -1.68%
Old Mutual (OML) 195.40p -1.66%

FTSE 250 - Risers

Ted Baker (TED) 2,380.00p 4.85%
Clarkson (CKN) 2,467.00p 3.96%
Shawbrook Group (SHAW) 277.90p 3.31%
Diploma (DPLM) 754.50p 2.93%
Saga (SAGA) 207.30p 2.93%
Northgate (NTG) 412.60p 2.56%
Redrow (RDW) 377.80p 2.55%
Bellway (BWY) 2,325.00p 2.47%
Ophir Energy (OPHR) 82.20p 2.43%
QinetiQ Group (QQ.) 224.60p 2.14%

FTSE 250 - Fallers

Melrose Industries (MRO) 376.40p -3.96%
Mitchells & Butlers (MAB) 272.00p -3.85%
Amec Foster Wheeler (AMFW) 492.00p -3.15%
Weir Group (WEIR) 1,200.00p -2.99%
Petrofac Ltd. (PFC) 875.00p -2.94%
Vedanta Resources (VED) 423.80p -2.62%
Essentra (ESNT) 868.00p -2.58%
Evraz (EVR) 139.70p -2.58%
Tullow Oil (TLW) 235.30p -2.16%
Hays (HAS) 130.50p -1.95%