London midday: Stocks slip into the red as investors react to weak PMIs

After a brief stint in positive territory, UK stocks had slipped into the red by Monday lunchtime as a raft of economic data from across Europe dampened market sentiment.

“Investors are still weighing the Federal Reserve’s blockbuster 50 basis point interest rate cut last week, which was seen in some quarters as worrying about the state of the world’s largest economy, despite the Fed’s best efforts to offer reassurance," said AJ Bell investment director Russ Mould.

Just after the midday mark, the FTSE 100 was down 0.2% at 8,212.83, pulling back after touching a high of 8,262.53 early on.

In economic data, private business activity in the UK grew less than expected in September with growth in tailing off slightly across the board, according to a purchasing managers' index (PMI) survey out on Monday by S&P Global.

The overall composite PMI fell to 52.9 in September from 53.8 in August, S&P Global said. Business activity grew for the 11th straight month – indicated by any reading over the 50-point neutral level – but slowdowns in both manufacturing and services meant that the overall speed of recovery eased for the first time since June.

However, Chris Williamson, chief business economist at S&P Global Market Intelligence, said the slowdown "should not be seen as too concerning, as the survey data are still consistent with the economy growing at a rate approaching 0.3% in the third quarter, which is in line with the Bank of England’s forecast".

In other news, the eurozone composite PMI dropped to 48.9 in September, down from 51.0 in August and below the key 50-point level which separates contraction and expansion. This was the lowest reading since January and well below the consensus estimate of 50.6, as the manufacturing sector continued to deteriorate.

Back on home shores, UK investors were watching out for any headlines from the Labour party conference which is due to kick off later in Liverpool, with Chancellor Rachel Reeves’ speech in focus.

"There is some relief swirling, given early briefings indicate she’ll stress that the UK won’t return to austerity and instead she’ll home in on ways to increase investment in the UK," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Rightmove gets new and improved offer

Rightmove on Monday said it would respond to a third offer from Rupert Murdoch’s REA Group for the UK housing portal valuing it at £6.1bn, "in due course". REA’s offer is worth 770p per Rightmove share, trumping the 705p-per-share initial offer made earlier this month, and a second rebuffed offer made last week.

Retail stocks were mostly higher on the back of positive comments made by UBS, with M&S, Kingfisher AB Foods and Next performing well. However, discounter B&M was was the worst performer as the bank initiated coverage of the stock with a 'sell' rating.

Shares in Alphawave IP dropped by almost a third after the connectivity solutions group swung to a loss in the first half while revenues halved, blaming an "expected strategic change in business mix" and the timing of specific customer programmes.

Meanwhile, electrical retailer Currys was up 7% after Berenberg lifted its price target for the stock to 125p from 92p as it pointed to confidence in both the growth outlook and improving cash generation.

Market Movers

FTSE 100 (UKX) 8,212.83 -0.21%
FTSE 250 (MCX) 20,822.49 -0.04%
techMARK (TASX) 4,774.86 -0.35%

FTSE 100 - Risers

Flutter Entertainment (DI) (FLTR) 17,400.00p 1.46%
Marks & Spencer Group (MKS) 374.80p 1.43%
Rightmove (RMV) 684.00p 1.42%
Kingfisher (KGF) 327.10p 1.33%
SSE (SSE) 1,950.50p 0.98%
HSBC Holdings (HSBA) 665.80p 0.80%
Associated British Foods (ABF) 2,254.00p 0.76%
JD Sports Fashion (JD.) 153.20p 0.76%
Auto Trader Group (AUTO) 881.00p 0.71%
Next (NXT) 10,045.00p 0.69%

FTSE 100 - Fallers

B&M European Value Retail S.A. (DI) (BME) 408.90p -2.85%
International Consolidated Airlines Group SA (CDI) (IAG) 202.10p -2.51%
AstraZeneca (AZN) 11,542.00p -2.02%
Barclays (BARC) 222.70p -1.79%
Ashtead Group (AHT) 5,528.00p -1.74%
Smith (DS) (SMDS) 460.40p -1.71%
easyJet (EZJ) 511.20p -1.54%
Rentokil Initial (RTO) 360.10p -1.29%
Anglo American (AAL) 2,102.00p -1.27%
Halma (HLMA) 2,575.00p -1.15%

FTSE 250 - Risers

Currys (CURY) 84.15p 7.33%
IntegraFin Holding (IHP) 372.00p 3.48%
PPHE Hotel Group Ltd (PPH) 1,280.00p 2.40%
Auction Technology Group (ATG) 413.00p 2.35%
Baltic Classifieds Group (BCG) 290.00p 2.29%
SDCL Energy Efficiency Income Trust (SEIT) 64.90p 1.88%
Alpha Group International (ALPH) 2,255.00p 1.58%
Dunelm Group (DNLM) 1,231.00p 1.57%
GCP Infrastructure Investments Ltd (GCP) 79.50p 1.53%
Future (FUTR) 1,060.00p 1.44%

FTSE 250 - Fallers

Bridgepoint Group (Reg S) (BPT) 319.80p -5.83%
Close Brothers Group (CBG) 410.00p -4.87%
NCC Group (NCC) 169.20p -4.62%
Hays (HAS) 90.85p -3.14%
Burberry Group (BRBY) 587.60p -2.78%
Ashmore Group (ASHM) 194.10p -2.61%
W.A.G Payment Solutions (WPS) 82.00p -2.38%
Aston Martin Lagonda Global Holdings (AML) 159.50p -2.33%
Apax Global Alpha Limited (APAX) 144.00p -2.17%
IP Group (IPO) 47.60p -1.86%