London close: Stocks end lower as investors weigh disappointing US data

Markit’s US manufacturing purchasing managers’ index fell to 52.6 in November from the prior month’s 54.1, well below the reading of 54 that was expected by analysts but above the 50 threshold that separates an expansion from a contraction.

Separately a report showed a 3.4% drop in US existing home sales to 5.36m, which was more than the 2.7% fall to 5.36m predicted.

The data comes amid speculation on whether the Federal Reserve will raise interest rates at its meeting next month.

Federal Reserve Bank of San Francisco president John Williams said over the weekend that there is likely to be a “strong case” for raising interest rates next month following a batch of upbeat economic data. The second estimate of third quarter US gross domestic product on Tuesday will be closely monitored for signs of further recovery which could back such a case for a rate hike at the 15-16 December Fed policy meeting.

China worries, Chile output talk weigh on copper

The Bloomberg Commodity index plumbed a 16-year low on Monday even as oil futures bounced back on a statement from the Saudi cabinet saying the country stood ready to use all measures to keep the market stable.

As of 16:35 three-month copper futures were down 2.9% to $4,478.0 per metric tonne in LME trading.

On Thursday and Friday of last week, Goldman Sachs and Bank of America-Merrill Lynch both flagged the risk of a larger than expected depreciation in the Chinese Yuan next year, which could weigh on commodity prices.

Chile´s Codelco, the world’s largest producer of copper, announced its intention to focus on "cost cuts" rather than production cuts on Saturday.

Fragile euro area data

Meanwhile, Eurozone manufacturing activity rose to a 19-month high in November, according to Markit’s flash PMI, which increased to 52.8 from 52.3 in October.

“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.”

FTSE 100: Miners weigh on index

In company news, miners were in the red, including Glencore, Anglo American and BHP Billiton, as metal prices declined.

Aerospace and defence stocks Rolls-Royce and BAE Systems gained as prime minister David Cameron announced a £12bn increase to the defence budget.

HSBC was a high riser as Standard Life Investments’ head of equities, David Cumming, said it would back the bank if it decides to relocate its headquarters outside the UK to escape increasingly burdensome regulations.

Tesco dropped it emerged that losses at Harris & Hoole – the coffee chain part-owned by the supermarket retailer – doubled last year following a rapid expansion. Pre-tax losses at the coffee chain widened to £25.6m in the year ending 1 March 2015 from £12.8m the previous year.

Imperial Tobacco rose as Citigroup raised its rating to ‘buy’ from ‘neutral’ and increased the price target to 4,000p from 3,700p.

Mitie Group slumped after half-year operating profits were hit by the deteriorating performance of its healthcare arm, even as the company exited unprofitable contracts in that segment.

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) 6,305.49 -0.46%
FTSE 250 (MCX) 17,106.91 -0.48%
techMARK (TASX) 3,182.21 -0.24%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 569.00p 3.08%
Babcock International Group (BAB) 1,011.00p 2.22%
Johnson Matthey (JMAT) 2,754.00p 1.81%
BAE Systems (BA.) 498.50p 1.32%
CRH (CRH) 1,917.00p 0.89%
Inmarsat (ISAT) 1,061.00p 0.86%
Wolseley (WOS) 3,778.00p 0.75%
Fresnillo (FRES) 701.00p 0.72%
HSBC Holdings (HSBA) 534.90p 0.72%
Sage Group (SGE) 565.00p 0.62%

FTSE 100 - Fallers

TUI AG Reg Shs (DI) (TUI) 1,088.00p -3.46%
Tesco (TSCO) 165.65p -3.38%
Morrison (Wm) Supermarkets (MRW) 152.10p -2.75%
easyJet (EZJ) 1,646.00p -2.31%
RSA Insurance Group (RSA) 429.20p -2.21%
Antofagasta (ANTO) 497.00p -2.17%
Intertek Group (ITRK) 2,583.00p -2.12%
Land Securities Group (LAND) 1,225.00p -1.84%
Glencore (GLEN) 90.65p -1.82%
Burberry Group (BRBY) 1,258.00p -1.80%

FTSE 250 - Risers

Home Retail Group (HOME) 110.10p 6.48%
Spire Healthcare Group (SPI) 290.80p 3.89%
AO World (AO.) 161.00p 3.54%
Premier Oil (PMO) 74.90p 3.38%
Pets at Home Group (PETS) 284.10p 2.75%
Virgin Money Holdings (UK) (VM.) 364.10p 2.71%
Aldermore Group (ALD) 262.90p 2.46%
Supergroup (SGP) 1,627.00p 2.26%
Bank of Georgia Holdings (BGEO) 1,880.00p 2.12%
Pace (PIC) 390.70p 1.98%

FTSE 250 - Fallers

Playtech (PTEC) 775.00p -8.98%
Nostrum Oil & Gas (NOG) 355.00p -8.86%
Mitie Group (MTO) 303.30p -8.67%
Enterprise Inns (ETI) 102.00p -4.67%
Riverstone Energy Limited (RSE) 801.00p -4.30%
Poundland Group (PLND) 216.00p -4.30%
Lookers (LOOK) 170.10p -3.90%
Amec Foster Wheeler (AMFW) 438.20p -3.88%
Foxtons Group (FOXT) 177.20p -3.43%
Close Brothers Group (CBG) 1,429.00p -3.25%