London midday: Stocks erase losses after UK deficit revision, but gains limited

London's stocks had erased losses by Thursday lunchtime though upside was limited as investors showed caution following a raft of mostly disappointing global economic data.

The FTSE 100, which had dropped to a low of 6,995.79 in mid-morning trade, was broadly flat (+0.02%) at 7,029.97 by midday.

Revisions to UK public-sector net borrowing figures had given markets a lift before noon after the deficit was revised down to £87.3bn for the 2014/15 fiscal year, below the £90.2bn budget forecast.

The FTSE 100 rose to an intraday high of 7,052.42 before paring gains.

"This news helped boost the FTSE to some marginal gains as the morning continued. Yet the index is still looking limp with the mixed performance for its commodity stocks, and the continued uncertainty over a general election that is only two weeks away, preventing the FTSE from seeing any robust growth," said Spreadex analyst Connor Campbell.

In economic data, a HSBC survey said the Chinese manufacturing purchasing managers' index fell from 49.6 to a one-year low of 49.2, surprising analysts who had expected no change.

Economist Chris Williamson from Markit said the soft data added to the chance of further policy stimulus from Beijing. “The drop in the PMI in April clearly represents a disappointing start to the second quarter, raising the possibility of economic growth having lost further momentum compared to the already-weak rate seen in the opening quarter of the year," he said.

Closer to home, growth in both Eurozone manufacturing and services slowed down in April, causing the Eurozone composite PMI to fall to 53.5 from 54. The market had expected an increase to 54.4.

Meanwhile, UK retail sales fell in March due to a decline in fuel sales, the Office for National Statistics said on Thursday.
Sales fell 0.5% against expectations for 0.4% increase, and worse than February’s 0.6% jump.

Pace rockets on Arris deal

Pace, the UK cable television set-top box maker, jumped 35% after agreeing to be taken over by US telecommunications equipment manufacturer Arris in a $2.1bn deal. Pace management have agreed that Arris will pay Pace shareholders 426.5p in cash and stock, a 28% premium to the closing price on Wednesday.

A number of heavyweight stocks were providing a drag on the Footsie after going ex-dividend, including Aggreko, Antofagasta, ARM Holdings, Barratt Development, BG Group, Glencore, Legal & General, Mondi, Old Mutual and Unilever.

Aeroplane and components maker Meggitt gained after trading in the first quarter continued along its expected flight path of low to mid single-digit revenue growth for the full year.

Diversified mining giant Anglo American fell after two of its three largest divisions experiencing declines in output in the first quarter.

First-quarter profits shrank at William Hill, causing shares to drop, in part due to the bookmaker's worst ever loss-making week from football betting and the new UK point-of-consumption tax.

UK housebuilder Taylor Wimpey edged higher with a bullish statement to the market, saying that a strong economy has prompted an upbeat start to the spring selling season.

Market Movers
techMARK 3,247.85 +0.34%
FTSE 100 7,029.97 +0.02%
FTSE 250 17,596.66 -0.22%

FTSE 100 - Risers
Ashtead Group (AHT) 1,158.00p +1.67%
United Utilities Group (UU.) 989.00p +1.59%
Experian (EXPN) 1,208.00p +1.34%
Rio Tinto (RIO) 2,900.50p +1.29%
Vodafone Group (VOD) 230.30p +1.23%
Coca-Cola HBC AG (CDI) (CCH) 1,356.00p +1.12%
Tesco (TSCO) 225.00p +1.06%
SSE (SSE) 1,582.00p +1.02%
Barclays (BARC) 255.85p +1.01%
Centrica (CNA) 262.60p +0.96%

FTSE 100 - Fallers
Legal & General Group (LGEN) 266.00p -4.04%
Old Mutual (OML) 229.00p -3.58%
Glencore (GLEN) 292.05p -3.37%
Weir Group (WEIR) 1,742.00p -3.33%
Mondi (MNDI) 1,318.00p -2.59%
Aggreko (AGK) 1,632.00p -2.39%
Barratt Developments (BDEV) 525.00p -1.78%
Sports Direct International (SPD) 620.00p -1.74%
Johnson Matthey (JMAT) 3,410.00p -1.62%
Antofagasta (ANTO) 739.00p -1.40%

FTSE 250 - Risers
Pace (PIC) 448.80p +35.18%
Premier Farnell (PFL) 193.60p +3.81%
Allied Minds (ALM) 700.00p +3.24%
Entertainment One Limited (ETO) 317.20p +2.19%
Telecom Plus (TEP) 834.50p +2.14%
Card Factory (CARD) 326.00p +1.97%
BlackRock World Mining Trust (BRWM) 301.20p +1.65%
Evraz (EVR) 189.00p +1.56%
Petra Diamonds Ltd.(DI) (PDL) 163.50p +1.55%
Bank of Georgia Holdings (BGEO) 1,942.00p +1.52%

FTSE 250 - Fallers
Senior (SNR) 324.90p -5.85%
Hansteen Holdings (HSTN) 119.60p -5.00%
Elementis (ELM) 303.30p -3.71%
RPS Group (RPS) 236.70p -3.47%
William Hill (WMH) 359.80p -3.36%
UBM (UBM) 541.00p -3.31%
Ophir Energy (OPHR) 159.50p -2.74%
Rotork (ROR) 2,393.00p -2.68%
Ocado Group (OCDO) 331.30p -2.59%
Vedanta Resources (VED) 581.00p -2.35%