London close: Stocks mixed amid global manufacturing weakness

The FTSE 100 recorded a marginal decline of 0.06% to close at 7,527.26, while the FTSE 250 turned in a modest increase of 0.49% to end the day at 18,507.77.

In currency markets, the sterling was last down 0.02% on the dollar to trade at $1.2701, while it edged down 0.03% against the euro, changing hands at €1.1634.

“The first half of the year finished with most indices heading higher,” said IG chief market analyst Chris Beauchamp.

“The bullish atmosphere from Friday has not carried over into the new week however, mainly thanks to the US holiday tomorrow.

“After the caution of the first half, a lot of investors will be looking to put their money to work, even if it comes after six months of solid gains.”

Global manufacturing sector shows signs of slowdown

In economic news, the UK’s manufacturing industry reported a further deepening of its downturn, with the S&P Global/CIPS manufacturing purchasing managers’ index (PMI) falling to a six-month low of 46.5 from 47.1 in the previous month.

That marked the 11th consecutive month of contraction for the sector, underscoring persistent challenges being faced by the industry.

The survey identified all five subcomponent indices, including output, new orders, stocks of purchases, employment, and suppliers' delivery times, as reflecting deteriorating operating conditions.

“Producers are being hit by weak domestic and export market conditions with clients showing a greater reluctance to commit to spending due to market uncertainty, increased competition and elevated costs,” said Rob Dobson, director at S&P Global Market Intelligence.

“This is also impacting business optimism and stoking fears among some manufacturers that client spending may shift to lower cost rivals and markets.

“Although some respite is being offered in the short-term by reduced pressures on supply chains and costs, these remain a symptom of the current weakness of demand faced by the sector and are therefore unlikely to play a role in boosting production moving forward.”

On the continent, manufacturing activity in the eurozone also saw an accelerated contraction in June, with the S&P Global final PMI dropping to 43.4, down from May's 44.8.

That was the lowest level recorded since the height of the Covid-19 pandemic.

Tightened monetary policy by the European Central Bank, constricting financial accessibility, was highlighted as a key factor influencing this downward trend.

In the United States, the Institute for Supply Management's manufacturing sector PMI showed a decline from 46.9 in May to 46.0 in June.

The slip confounded expectations for a slight improvement, indicating an acceleration in the slowdown of factory sector activity.

ISM’s survey also showed faster declines in prices.

Finally on data, China’s manufacturing sector too registered slower growth in June, as the Caixin/S&P Global PMI fell from 50.9 in May to 50.5.

However, the result surpassed expectations, which had predicted a reading of 50.0, reflecting that the sector still experienced growth, albeit at a reduced rate.

Mining stocks lead gains as AstraZeneca tumbles

On London’s equity markets, rising base metals prices provided a substantial boost to heavyweight mining companies.

Anglo American was the biggest gainer, advancing 4.32%, closely followed by Glencore with a 3.25% increase.

Rio Tinto Group and Antofagasta also made substantial gains, up by 2.12% and 2.46% respectively.

Retail giant Tesco also ended the day on a positive note, with a modest gain of 1.45%.

That came after the company announced the appointment of Gerry Murphy as its new chairman, effective from 1 September, succeeding John Allan who had stepped down in the wake of allegations of misconduct.

ME Group International meanwhile jumped 4.03% after the vending machine company, formerly known as Photo-Me, announced the acquisition of Fujifilm's automated photobooth business in Japan for up to £5.5m.

The final transaction amount remained subject to potential adjustments, and would be funded via a local loan facility, or existing cash reserves if necessary.

On the downside, pharmaceutical giant AstraZeneca emerged as a major faller, with its shares tumbling 8%.

The company took a hit following the announcement of the results of a significant study of a new lung cancer drug.

“The outcome of the trial was a positive one, however analysts have suggested a lack of clarity over survival improvement rates is behind today’s share price weakness,” said CMC Markets analyst Michael Hewson.

“This comes across as a bit of an overreaction given that the data is still being analysed, and its one drug of many, nonetheless today’s weakness is acting as a more than 50 point drag on the index.”

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,527.26 -0.06%
FTSE 250 (MCX) 18,507.77 0.49%
techMARK (TASX) 4,403.33 -1.38%

FTSE 100 - Risers

Ocado Group (OCDO) 601.80p 5.95%
Anglo American (AAL) 2,329.50p 4.32%
Glencore (GLEN) 458.95p 3.25%
BP (BP.) 470.80p 2.72%
Fresnillo (FRES) 625.40p 2.49%
Antofagasta (ANTO) 1,497.00p 2.46%
Abrdn (ABDN) 223.50p 2.43%
Smith (DS) (SMDS) 278.40p 2.43%
Imperial Brands (IMB) 1,780.50p 2.42%
Land Securities Group (LAND) 588.00p 2.40%

FTSE 100 - Fallers

AstraZeneca (AZN) 10,374.00p -8.00%
Smith & Nephew (SN.) 1,195.00p -5.76%
Halma (HLMA) 2,227.00p -2.20%
Melrose Industries (MRO) 495.20p -2.17%
B&M European Value Retail S.A. (DI) (BME) 547.20p -1.76%
Flutter Entertainment (CDI) (FLTR) 15,540.00p -1.65%
London Stock Exchange Group (LSEG) 8,252.00p -1.36%
Convatec Group (CTEC) 202.60p -1.27%
Compass Group (CPG) 2,175.00p -1.23%
3i Group (III) 1,926.00p -1.15%

FTSE 250 - Risers

Baltic Classifieds Group (BCG) 195.20p 6.09%
TUI AG Reg Shs (DI) (TUI) 585.00p 4.93%
Ferrexpo (FXPO) 93.35p 4.30%
Harbour Energy (HBR) 238.00p 4.11%
Watches of Switzerland Group (WOSG) 634.00p 4.10%
Mobico Group (MCG) 101.20p 4.06%
Me Group International (MEGP) 170.20p 4.03%
British Land Company (BLND) 313.30p 3.47%
IntegraFin Holding (IHP) 244.80p 3.29%
Warehouse Reit (WHR) 82.00p 3.27%

FTSE 250 - Fallers

Molten Ventures (GROW) 255.40p -4.42%
Helios Towers (HTWS) 89.60p -3.76%
Renishaw (RSW) 3,808.00p -2.41%
Oxford Instruments (OXIG) 2,700.00p -2.20%
Abrdn Private Equity Opportunities Trust (APEO) 446.00p -1.87%
Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 271.00p -1.81%
Bridgepoint Group (Reg S) (BPT) 199.00p -1.78%
Tyman (TYMN) 252.00p -1.75%
Liontrust Asset Management (LIO) 703.50p -1.75%
Bytes Technology Group (BYIT) 518.50p -1.71%