London open: CRH and oil stocks lift FTSE 100 ahead of PMI data

Strong gains from CRH and a host of oil stocks pushed UK markets higher on Monday, as investors awaited a host of manufacturing data from across the globe.

London’s FTSE 100 was up 0.4% at 6,777 early on.

CRH was on the rise after agreeing a deal to buy assets from Holcim and Lafarge, while energy shares were boosted by a recent rebound in crude.

Brent oil futures were down 2.5% on Monday morning but were still firmly above $50 a barrel after having spiked the previous session on the back of news of reduced drilling in the States.

Crude surged as much as 8% on Friday, rebounding from a six-year low, after data from Baker Hughes showed that the number of US rigs drilling for oil dropped by 94, or 7%, last week. News that Chevron had followed in the footsteps of other oil majors to slash its drilling budget also pushed up prices.

In economic news, China’s manufacturing sector recorded its first monthly contraction in over two years in January, according to government data released on Sunday.

The official purchasing managers’ index (PMI) for manufacturing fell to 49.8 last month from 50.1 in December, according to the National Bureau of Statistics. This was the first time the government’s factory PMI slipped below the key 50-point breakeven mark since September 2012, and surprised economists who had predicted a small improvement to 50.2.

The Markit UK manufacturing PMI, due out at 09:30 GMT, and is forecast to show a slight up-tick in growth from 52.7 to 52.5.

Meanwhile, final estimates of January manufacturing PMIs are also expected from Spain, Italy, France, Germany and US on Monday.

CRH cements deal for Holcim-Lafarge assets

Irish building materials group CRH rose 6% after confirming it will spend €6.5bn on assets from Holcim and Lafarge as the two European cement makers dispose of operations to win approval for their merger. CRH, which said it expected the deal to make it the “global number-three building materials player”, will finance the acquisition using a combination of existing cash, bank facilities and an equity placing.

Energy stocks such as Tullow, BG Group, Shell, Premier Oil, Cairn Energy and Ophir Energy were making decent gains after the recent rebound in crude. BP also edged higher ahead of its fourth-quarter results on Tuesday.

Enquest rose after saying that it would get $23m back after exiting its investments in Tunisia, though 2014 production would be slightly lower than previously thought as a result.

Shares in struggling oil group Afren rebounded strongly, up 46%, though were still well below levels seen at the start of the year. After saying that it was in need of immediate funding, the company announced over the weekend that lenders had allowed it to defer a $50m payment due on its debt by a month. Afren also said it would delay a $15m bond coupon payment.

In contrast, the rising oil price was weighing on shares in travel groups such as Easyjet, IAG and Carnival.

Market Movers
techMARK 3,061.52 +0.35%
FTSE 100 6,776.79 +0.41%
FTSE 250 16,360.55 +0.34%

FTSE 100 - Risers
CRH (CRH) 1,701.00p +6.11%
BG Group (BG.) 919.80p +3.71%
Tullow Oil (TLW) 376.60p +3.18%
Sainsbury (J) (SBRY) 262.80p +2.90%
Shire Plc (SHP) 4,969.00p +2.37%
Royal Dutch Shell 'B' (RDSB) 2,142.50p +1.81%
Coca-Cola HBC AG (CDI) (CCH) 1,089.00p +1.68%
Dixons Carphone (DC.) 441.70p +1.54%
BHP Billiton (BLT) 1,465.00p +1.52%
Royal Dutch Shell 'A' (RDSA) 2,047.00p +1.44%

FTSE 100 - Fallers
easyJet (EZJ) 1,789.00p -3.92%
Fresnillo (FRES) 880.00p -2.11%
Randgold Resources Ltd. (RRS) 5,600.00p -1.50%
Kingfisher (KGF) 338.60p -1.23%
Rolls-Royce Holdings (RR.) 880.50p -1.23%
Carnival (CCL) 2,962.00p -1.17%
Ashtead Group (AHT) 1,078.00p -0.92%
International Consolidated Airlines Group SA (CDI) (IAG) 539.50p -0.92%
Direct Line Insurance Group (DLG) 309.80p -0.86%
Rio Tinto (RIO) 2,902.50p -0.77%

FTSE 250 - Risers
Afren (AFR) 7.75p +46.23%
Ophir Energy (OPHR) 140.50p +4.62%
Premier Oil (PMO) 150.20p +3.87%
Soco International (SIA) 272.70p +3.61%
RPS Group (RPS) 188.00p +3.07%
Grainger (GRI) 199.60p +2.94%
Zoopla Property Group (WI) (ZPLA) 185.20p +2.89%
Cairn Energy (CNE) 197.00p +2.60%
Hunting (HTG) 407.50p +2.46%
Redefine International (RDI) 55.65p +2.39%

FTSE 250 - Fallers
Nostrum Oil & Gas (NOG) 592.00p -5.58%
Oxford Instruments (OXIG) 716.50p -3.76%
Game Digital (GMD) 268.80p -2.43%
Just Retirement Group (JRG) 136.00p -2.37%
Saga (SAGA) 180.10p -1.75%
Poundland Group (PLND) 347.10p -1.73%
Brit (BRIT) 269.80p -1.39%
Millennium & Copthorne Hotels (MLC) 567.00p -1.39%
Infinis Energy (INFI) 191.70p -1.29%
Micro Focus International (MCRO) 1,039.00p -1.24%