London open: FTSE floats higher ahead of manufacturing data print

London stocks opened higher on Monday as investors look ahead to some key manufacturing data later in the day and the Bank of England rate announcement on Thursday.

The FTSE 100 was up 0.5% to 6,757.89 after more than half an hour of trading, while the FTSE 250 was up 0.2% to 17,318.87.

This follows a positive Asian session despite China's manufacturing data showed little signs of improvement, with official manufacturing PMI deteriorated slightly to 49.9 from 50.0 in June, though the Caixin manufacturing survey of small and medium companies showed a slight improvement to come in at 50.6, while services also improved to 53.9.

Closer to home on the data front, UK manufacturing PMI is at 0930 BST. In the US, ISM manufacturing is at 1500 BST, along with construction spending.

"Even though this week’s focus is likely to be on the August Bank of England rate meeting and quarterly inflation report on Thursday, as well as Friday’s July US payrolls report, there is a whole host of other economic data this week could well help shape the market reaction to both of these events," said CMC Markets’ Michael Hewson.

“Attention is likely to be on the latest manufacturing PMI data for July, with a particular focus on the UK number after the disappointing flash PMI number a couple of weeks ago."

UK flash PMI manufacturing data fell to 49.1 from 52.1 in June, but there is a chance this could be revised higher, Hewson noted, as the flash number was taken at a time when political uncertainty was at elevated levels.

In corporate news, the big banks all confirmed the results of the stress tests released on Friday.

Barclays said its Tier 1 capital ratio fell to 7.3% from a 2015 year-end position of 11.4% under a.

Shares in Lloyds Bank were strongly ahead even though its CET1 ratio fell to 10.1%, compared with a 2015 year-end position of 13%. At the same time the group's fully loaded leverage ratio moves from 5.2% to 4.6% Lloyds.

Royal Bank of Scotland's ratio fell by 7.5 percentage points to 8.1%.

The 2016 EU‐wide stress tests, which do not contain a pass or fail threshold, were set by the European Central Bank and European Systemic Risk Board and covered a three‐year time horizon (2016‐2018). The stress tests were been carried out applying a static balance sheet assumption as at December 2015, and therefore does not take into account subsequent or future business strategies and management actions, so are not a forecast of the banks' profits.

Elsewhere, Intertek reported a jump in first-half profit as revenue grew strongly and said the UK’s decision to leave the European Union was unlikely to affect the company’s growth opportunities.

GlaxoSmithKline revealed it has formed a joint venture with the former Google Life Sciences business to develop bioelectronic medicines. GSK and Verily Life Sciences - an Alphabet company - have formed Galvani Bioelectronics to enable the research, development and commercialisation of bioelectronic medicines, with GSK holding a 55% equity interest and together with Verily will invest up to a combined £540m over seven years.

Burberry has taken full control of its retail business in China, snapping up the final 15% it did not own for £54m.

Morrisons was leading the fallers on news that it has launched the latest offensive in the supermarket price war, reportedly cutting prices on more than 1,000 products by an average of 18%.

Market Movers

FTSE 100 (UKX) 6,753.97 0.44%
FTSE 250 (MCX) 17,337.93 0.32%
techMARK (TASX) 3,488.73 0.45%

FTSE 100 - Risers

Associated British Foods (ABF) 2,782.00p 3.38%
BHP Billiton (BLT) 966.20p 2.28%
Anglo American (AAL) 844.90p 1.73%
Antofagasta (ANTO) 508.50p 1.60%
Lloyds Banking Group (LLOY) 53.87p 1.35%
Travis Perkins (TPK) 1,581.00p 1.35%
Schroders (SDR) 2,653.00p 1.34%
Barratt Developments (BDEV) 443.30p 1.33%
Legal & General Group (LGEN) 208.40p 1.31%
Aviva (AV.) 396.10p 1.28%

FTSE 100 - Fallers

Morrison (Wm) Supermarkets (MRW) 180.70p -2.74%
Pearson (PSON) 861.00p -2.38%
Tesco (TSCO) 154.05p -1.25%
Intertek Group (ITRK) 3,589.00p -0.99%
Provident Financial (PFG) 2,686.00p -0.85%
Capita (CPI) 953.50p -0.68%
British American Tobacco (BATS) 4,792.50p -0.66%
Sainsbury (J) (SBRY) 223.30p -0.45%
Admiral Group (ADM) 2,156.00p -0.37%
GlaxoSmithKline (GSK) 1,683.00p -0.30%

FTSE 250 - Risers

Kaz Minerals (KAZ) 163.90p 4.00%
Petrofac Ltd. (PFC) 774.50p 3.89%
Virgin Money Holdings (UK) (VM.) 270.10p 2.43%
Henderson Group (HGG) 236.30p 2.29%
Millennium & Copthorne Hotels (MLC) 462.20p 2.26%
Acacia Mining (ACA) 571.50p 2.14%
Hochschild Mining (HOC) 272.80p 2.10%
Morgan Advanced Materials (MGAM) 279.30p 1.93%
Tullow Oil (TLW) 201.50p 1.92%
CYBG (CYBG) 265.80p 1.92%

FTSE 250 - Fallers

Metro Bank (MTRO) 1,980.00p -4.39%
Vedanta Resources (VED) 557.50p -2.79%
Countrywide (CWD) 241.40p -2.66%
Ascential (ASCL) 264.10p -2.29%
IP Group (IPO) 154.50p -1.97%
Sophos Group (SOPH) 244.20p -1.93%
Thomas Cook Group (TCG) 63.75p -1.92%
Diploma (DPLM) 842.00p -1.35%
NCC Group (NCC) 320.90p -1.29%
Barr (A.G.) (BAG) 533.50p -1.20%