London midday: Stocks rise as investors shrug off disappointing PMIs

By Sharecast News

Sharecast News | 01 Mar, 2016

Updated : 12:06

London stocks rose on Tuesday as investors expressed indifference at disappointing UK and China manufacturing data.

The Markit/CIPS manufacturing purchasing managers’ index, measuring sector activity in the UK, fell to 50.8 in February from 52.9 in January. It was below economists’ expectations for a reading of 52.2 and marked the lowest reading since April 2013. Still, it remained just above the 50 mark that separates expansion from contraction.

“The near-stagnation of manufacturing highlights the ongoing fragility of the economic recovery at the start of the year and provides further cover for the Bank of England’s increasingly dovish stance,” said Rob Dobson, senior economist at Markit.

The official China manufacturing PMI dropped to 49.0 in February from 49.4 in January, surprising analysts who had expected no change.

Caixin’s PMI on manufacturing was released the same day, also showing a worse-than-expected drop. The PMI fell to 48.0 in February from 48.4 in January. Economists had pencilled in an unchanged reading.

However, economists continued to cheer Monday’s decision by China’s central bank to cut the required reserve ratio (RRR) for banks by 50 basis points.

An increase in oil prices also lifted the mood with Brent crude rising 0.92% to $36.91 per barrel and West Texas Intermediate increasing 1.4% to $34.24 per barrel at 1146 GMT.

Elsewhere, Markit’s Eurozone manufacturing PMI was revised higher at 51.2 in February from a flash estimate of 51.0, ahead of analysts’ projections for no change. However it marked a slowdown from the previous month’s reading of 52.3.

The unemployment rate in the Eurozone fell to 10.3% in January from 10.4% the month before, better than forecasts for it to remain the same and the lowest level since 2011, giving the European Central Bank some positive news to weigh against poor inflation and confidence data.

Still to come, US PMIs from Markit and the ISM will be released at 1445 GMT and 1500 GMT, respectively.

In company news, shares in Barclays plunged after it confirmed plans to sell its African business on Tuesday as it announced a drop in full year profit and a cut to the dividend. For the year to 31 December, adjusted pre-tax profit slipped 2% to £5.4bn and the bank announced a £1.45bn provision for PPI misselling.

The London Stock Exchange surged after Intercontinental Exchange confirmed it was considering making a bid for the UK exchange to rival Deutsche Boerse’s.

Rio Tinto advanced as it sold its 40% interest in the Bengalla coal joint venture in Australia for US$616.7m (£443m).

Glencore slumped as it reported a 32% drop in full year earnings before interest, tax, depreciation and amortisation (EBITDA) to $8.7bn (£6.25bn) due to weaker commodity prices.

Fresnillo was also under the cosh as it posted a 3.5% decrease in EBITDA to $547.5m.

Market Movers

FTSE 100 (UKX) 6,108.90 0.00%
FTSE 250 (MCX) 16,673.22 0.00%
techMARK (TASX) 3,191.52 0.00%

FTSE 100 - Risers

Imperial Brands (IMB) 3,766.00p 0.00%
Sage Group (SGE) 597.50p 0.00%
Standard Chartered (STAN) 433.00p 0.00%
Merlin Entertainments (MERL) 460.70p 0.00%
InterContinental Hotels Group (IHG) 2,735.00p 0.00%
CRH (CRH) 1,846.00p 0.00%
Kingfisher (KGF) 337.90p 0.00%
Glencore (GLEN) 134.25p 0.00%
Aberdeen Asset Management (ADN) 242.50p 0.00%
Sainsbury (J) (SBRY) 255.00p 0.00%

FTSE 100 - Fallers

FTSE 250 - Risers

Balfour Beatty (BBY) 250.30p 0.00%
Interserve (IRV) 432.80p 0.00%
Melrose Industries (MRO) 330.50p 0.00%
Restaurant Group (RTN) 538.50p 0.00%
Northgate (NTG) 405.30p 0.00%
DFS Furniture (DFS) 313.10p 0.00%
Big Yellow Group (BYG) 738.00p 0.00%
Monks Inv Trust (MNKS) 395.60p 0.00%
Redrow (RDW) 434.90p 0.00%
Bellway (BWY) 2,569.00p 0.00%

FTSE 250 - Fallers

London midday: Stocks rise as investors shrug off disappointing PMIs

Last news