London midday: Upbeat Eurozone PMI fails to boost stocks

The FTSE 100 was on the back foot at midday on Monday as a better-than-estimated report on Eurozone manufacturing failed to lift sentiment amid a lack of economic drivers.

Eurozone manufacturing activity rose to a 19-month high in November, according to Markit’s flash purchasing managers’ index, which increased to 52.8 from 52.3 in October. A level above 50 indicates an expansion while a reading below that signals a contraction.

“While the data is encouraging and points to slightly stronger growth in the fourth quarter from the meagre 0.3% seen in the third, I don’t think it will dissuade the ECB from easing monetary policy at the meeting next month,” said Craig Erlam, senior market analyst at Oanda.

“The recovery in the Eurozone is very fragile and these monthly improvements can quite easily be following by weak numbers next month.”

Markit will also release its PMI on US manufacturing at 1445 GMT and is expected to show a drop to 54 in November from 54.1 the previous month.

US existing home sales figures are then due at 1500 GMT, with analysts predicting a 2.7% drop to 5.40m in October compared to a month ago.

It is an otherwise quiet day of economic data, with investors turning their focus to company stocks.

Miners were in the red, including Glencore, Anglo American and BHP Billiton, as metal prices declined. Copper (-2.18%), gold (-0.75%) and silver (-1.42%) prices were down on the Comex mid-trading.

British American Tobacco declined after Citigroup said it sees only a 33% chance the company will bid for Imperial Tobacco. “We now believe a takeover is more likely than we did before FT Alphaville reported on 20 November that ‘advisers to British American Tobacco’ have put together a group of banks ‘willing to support an offer’,” the bank said . Imperial Tobacco jumped as Ctiigroup raised its rating to ‘buy’ from ‘neutral’ and raised the price target to 4,000p from 3,700p.

Mitie Group slumped after half-year operating profits were hit by the deterioration of its performance in its healthcare arm and as it exited unprofitable contracts in that segment.

Going the other way, BAE Systems, Rolls Royce and Babcock International benefitted from news that the UK will increase defence spending by £12bn.

Astrazeneca dipped after selling the US rights to Crohn’s disease medicine Entocort to Perrigo Company for $380m.

Playtech plunged on news that it scrapped its acquisition of Plus500, with a second proposed deal for Ava Trade hanging in the balance, after receiving a number of concerns from the Financial Conduct Authority.

Market Movers

FTSE 100 (UKX) 6,289.94 -0.71%
FTSE 250 (MCX) 17,103.36 -0.50%
techMARK (TASX) 3,177.29 -0.40%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 563.00p 1.99%
BAE Systems (BA.) 498.20p 1.26%
Next (NXT) 7,850.00p 0.83%
Royal Mail (RMG) 491.30p 0.55%
HSBC Holdings (HSBA) 533.90p 0.53%
Babcock International Group (BAB) 993.50p 0.46%
Inmarsat (ISAT) 1,055.00p 0.29%
Mondi (MNDI) 1,513.00p 0.20%
Imperial Tobacco Group (IMT) 3,560.00p 0.20%
CRH (CRH) 1,903.00p 0.16%

FTSE 100 - Fallers

Anglo American (AAL) 432.30p -3.18%
Glencore (GLEN) 89.48p -3.09%
Tesco (TSCO) 167.00p -2.60%
BHP Billiton (BLT) 864.00p -2.43%
Antofagasta (ANTO) 496.70p -2.22%
Morrison (Wm) Supermarkets (MRW) 153.30p -1.98%
BP (BP.) 374.05p -1.90%
Burberry Group (BRBY) 1,257.00p -1.87%
Aberdeen Asset Management (ADN) 338.90p -1.85%
Sainsbury (J) (SBRY) 249.20p -1.77%

FTSE 250 - Risers

Home Retail Group (HOME) 109.60p 6.00%
Clarkson (CKN) 2,273.00p 2.07%
AO World (AO.) 157.90p 1.54%
AL Noor Hospitals Group (ANH) 1,168.00p 1.13%
QinetiQ Group (QQ.) 263.70p 1.11%
Bank of Georgia Holdings (BGEO) 1,860.00p 1.03%
NMC Health (NMC) 768.00p 0.92%
Rank Group (RNK) 282.40p 0.89%
Jardine Lloyd Thompson Group (JLT) 905.00p 0.89%
Supergroup (SGP) 1,605.00p 0.88%

FTSE 250 - Fallers

Nostrum Oil & Gas (NOG) 353.80p -9.17%
Playtech (PTEC) 776.50p -8.81%
Mitie Group (MTO) 312.00p -6.05%
Poundland Group (PLND) 215.10p -4.70%
Evraz (EVR) 82.05p -4.37%
Amec Foster Wheeler (AMFW) 437.30p -4.08%
Sophos Group (SOPH) 278.00p -3.47%
TalkTalk Telecom Group (TALK) 223.10p -3.25%
Kaz Minerals (KAZ) 89.65p -3.13%
Close Brothers Group (CBG) 1,437.00p -2.71%