London midday: Stocks fall as UK services PMI growth eases

London stocks fell on Thursday after data showed a slowdown in UK and China services activity growth in April.

UK service sector growth slumped to a 38-month low in April. The Markit/CIPS UK services purchasing managers’ index fell to 52.3 in April from 53.7 in March, its lowest since February 2013 and below economists’ expectations for a reading of 53.6.

A reading above 50 indicates expansion, while one below that level suggests a contraction.

Chris Williamson, chief economist at Markit, said: “The slowdown in the service sector follows similar weakness in manufacturing and construction to make a triple-whammy of disappointing news on the health of the economy at the start of the second quarter.

““The PMI surveys are collectively indicating a near-stalling of economic growth, down from 0.4% in the first quarter to just 0.1% in April.”

The Caixin China services PMI came in at 51.8 for April, down from 52.2 in March. It follows disappointing manufacturing PMIs on Tuesday, fuelling worries about the health of the world’s second largest economy.

More positively, oil prices advanced as a wildfire near Canada’s oil-sands district threatened production. Fighting in Libya also helped to lift prices. Brent crude rose 1.76% to $45.52 per barrel and West Texas Intermediate increased 2.27% to $44.80 per barrel.

In company news, BT Group rallied after reporting a 9% rise in full year adjusted profits before tax to £3.5bn and a 6% gain in revenue to £18.9bn, boosted by two months' contribution from newly acquired EE.

RSA Insurance jumped after saying first quarter underwriting results were “good” with operating profits up strongly as a consequence.

Morrisons advanced after reporting a 0.7% rise in first quarter like-for-like sales, excluding fuel, and a 1.2% rise including fuel. It was the second consecutive quarter of positive like-for-like sales growth for the chain, which had been flagging in recent years.

Software company Sage was sitting lower after it reported a drop in first-half pre-tax profit despite a rise in revenue, as it announced an agreement to buy a 20.7% stake in Fairsail.

Rolls-Royce declined as it warned that 2016 continues to be a “challenging year overall as we sustain investment and start to transition major products in Civil Aerospace, and tackle weak markets in Marine”.

Centrica was under pressure after the British Gas owner announced plans to raise around £750m in a placing to fund acquisitions and cut debt.

Smith & Nephew dropped after saying weakness in China offset a solid performance in the US in its first quarter revenue.

Market Movers

FTSE 100 (UKX) 6,105.61 -0.10%
FTSE 250 (MCX) 16,667.84 0.05%
techMARK (TASX) 3,043.66 -0.17%

FTSE 100 - Risers

BT Group (BT.A) 454.55p 3.42%
RSA Insurance Group (RSA) 481.20p 2.49%
Next (NXT) 5,240.00p 1.75%
TUI AG Reg Shs (DI) (TUI) 1,002.00p 1.62%
Pearson (PSON) 795.50p 1.40%
National Grid (NG.) 994.20p 1.22%
Morrison (Wm) Supermarkets (MRW) 189.60p 1.12%
Imperial Brands (IMB) 3,749.00p 1.05%
United Utilities Group (UU.) 948.00p 1.01%
3i Group (III) 466.50p 1.00%

FTSE 100 - Fallers

Centrica (CNA) 206.80p -10.51%
Inmarsat (ISAT) 875.50p -5.86%
Rolls-Royce Holdings (RR.) 614.00p -4.81%
Smith & Nephew (SN.) 1,128.00p -3.09%
Provident Financial (PFG) 2,855.00p -2.96%
Sage Group (SGE) 587.50p -2.73%
Royal Bank of Scotland Group (RBS) 214.80p -2.01%
Randgold Resources Ltd. (RRS) 5,740.00p -1.54%
Kingfisher (KGF) 356.50p -1.41%
BP (BP.) 358.40p -1.14%

FTSE 250 - Risers

Greggs (GRG) 1,109.00p 5.82%
Tullow Oil (TLW) 255.80p 5.57%
Fidelity European Values (FEV) 168.40p 2.68%
esure Group (ESUR) 275.00p 2.23%
Restaurant Group (RTN) 281.50p 2.14%
BGEO Group (BGEO) 2,298.00p 1.95%
Murray International Trust (MYI) 931.50p 1.91%
Millennium & Copthorne Hotels (MLC) 445.90p 1.83%
International Personal Finance (IPF) 248.80p 1.76%
Marshalls (MSLH) 320.30p 1.65%

FTSE 250 - Fallers

OneSavings Bank (OSB) 276.00p -3.16%
McCarthy & Stone (MCS) 217.90p -3.16%
Henderson Group (HGG) 240.30p -3.10%
Shawbrook Group (SHAW) 283.40p -2.95%
Centamin (DI) (CEY) 110.30p -2.82%
Investec (INVP) 481.30p -2.23%
Polymetal International (POLY) 667.50p -2.13%
Interserve (IRV) 395.50p -2.03%
AO World (AO.) 176.40p -2.00%
Morgan Advanced Materials (MGAM) 221.60p -1.82%