London midday: Stocks climb as UK, China PMIs beat forecasts

Markit’s purchasing managers’ index on UK manufacturing fell to 51.5 in September from a revised reading of 51.6 in August, although it beat analysts’ estimates of 51.3 and was above the 50 level that separates expansion from contraction.

“The September purchasing managers’ survey indicates that UK manufacturers continue to finding life very challenging,” said Howard Archer, chief UK and European economist at IHS Global Insight.

“Certainly as far as the manufacturing sector is concerned, there is a case for the Bank of England to hold off from any interest rate hike until well into 2016.”

In China, the government’s official PMI manufacturing rose unexpectedly to 49.8 in September from 49.7 August, indicating a contraction.

Separately, a private survey by Caixin/Markit revealed a drop in PMI manufacturing in September to 47.2 from 47.3 a month earlier. September’s reading marked an upward revision from the initial estimate of 47, which analysts had expected to remain unchanged.

“These numbers still paint a picture of an economy where the recent easing measures do not appear to showing any evidence of a trickledown effect in the hard data, raising the prospect of further measures in the coming weeks,” said Michael Hewson, chief market analyst at CMC Markets.

US manufacturing data is also due in afternoon trade. Markit’s US manufacturing PMI at 1445 BST is expected to be confirmed at 53 in September. ISM’s US manufacturing index is projected to drop to 50.6 in September from 51.1 in August.

The US agenda will also include the release of weekly jobless claims and construction spending figures at 1330 BST and 1500 BST respectively. Federal Reserve official John Williams, who has called for an interest rate hike this year, will speak after close of trading in Salt Lake City. Williams on Monday signalled that the Fed should not wait much longer to raise rates. The Fed meets in October and December.

On the corporate front, Pearson topped the FTSE 100 after Citigroup reinstated coverage of the stock at ‘buy’ with a 1,425p price target, pointing to the scope for improving revenue trends, better free cash flow and potential or accretive cash usage.

Johnson Matthey jumped after completing the sale of its Alfa Aesar Research Chemicals business to Thermo Fisher Scientific for £256m in cash.

Oil producers, including BP and Royal Dutch Shell, edged up as oil prices rose after data showed an increase in global demand over the first half of the year. Estimates from the Joint Oil Data Initiative revealed that across 59 countries an average of 71.4m barrels were used per day over the six month period, up 3.3% year-on-year. Brent crude increased 1.7% to $49.21 per barrel, while the West Texas Intermediate grew 2.1% to $46.10 per barrel at 1148 BST.

Tullow Oil rallied after saying its lending banks have completed the routine six-monthly reserve-based lend redetermination process and available debt capacity remains unchanged at $3.7bn.

Glencore gained for a third day after its shares plunged on Monday, as the company reassured credit investors that its financing was strong.

Going the other way, supermarkets were in the red, snapping Wednesday’s gains on upbeat interims from J Sainsbury.

Market Movers

techMARK 3,033.18 +0.78%

FTSE 100 6,127.08 +1.08%

FTSE 250 16,835.05 +0.91%

FTSE 100 - Risers

Pearson (PSON) 1,170.00p +3.82%

London Stock Exchange Group (LSE) 2,504.00p +3.51%

BP (BP.) 345.55p +3.46%

Standard Chartered (STAN) 661.50p +3.23%

BHP Billiton (BLT) 1,035.00p +2.99%

Anglo American (AAL) 566.50p +2.83%

Royal Dutch Shell 'A' (RDSA) 1,594.50p +2.61%

Johnson Matthey (JMAT) 2,511.00p +2.57%

Royal Dutch Shell 'B' (RDSB) 1,603.00p +2.56%

Fresnillo (FRES) 604.50p +2.20%

FTSE 100 - Fallers

Morrison (Wm) Supermarkets (MRW) 162.30p -2.29%

Tesco (TSCO) 179.65p -1.94%

Imperial Tobacco Group (IMT) 3,367.00p -1.35%

Centrica (CNA) 226.30p -1.27%

Sainsbury (J) (SBRY) 257.80p -1.23%

Coca-Cola HBC AG (CDI) (CCH) 1,383.00p -1.00%

Burberry Group (BRBY) 1,359.00p -0.66%

British American Tobacco (BATS) 3,622.00p -0.58%

Vodafone Group (VOD) 207.35p -0.53%

British Land Company (BLND) 835.50p -0.36%

FTSE 250 - Risers

Kaz Minerals (KAZ) 94.25p +11.34%

Tullow Oil (TLW) 180.70p +6.86%

Ophir Energy (OPHR) 94.95p +5.68%

Henderson Group (HGG) 272.70p +4.80%

Zoopla Property Group (WI) (ZPLA) 218.70p +4.69%

Premier Oil (PMO) 69.60p +4.43%

Evraz (EVR) 76.05p +4.32%

Hunting (HTG) 417.50p +4.14%

Thomas Cook Group (TCG) 120.20p +3.89%

Cobham (COB) 294.80p +3.19%

FTSE 250 - Fallers

IG Group Holdings (IGG) 755.00p -1.88%

BBA Aviation (BBA) 263.40p -1.61%

CLS Holdings (CLI) 1,870.00p -1.58%

Petra Diamonds Ltd.(DI) (PDL) 82.95p -1.48%

Vesuvius (VSVS) 347.40p -1.42%

AO World (AO.) 166.10p -1.37%

TalkTalk Telecom Group (TALK) 310.90p -1.14%

Computacenter (CCC) 748.00p -1.06%

esure Group (ESUR) 245.50p -1.01%

Just Eat (JE.) 406.90p -0.85%

FTSE TechMARK - Risers

Oxford Instruments (OXIG) 607.50p +4.38%

Dialight (DIA) 654.00p +2.91%

RM (RM.) 165.25p +2.01%

KCOM Group (KCOM) 89.50p +0.56%

NCC Group (NCC) 275.00p +0.36%

IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 203.12 +0.20%

FTSE TechMARK - Fallers

Oxford Biomedica (OXB) 7.81p -3.34%

Consort Medical (CSRT) 924.00p -1.18%

Skyepharma (SKP) 348.00p -0.85%

SDL (SDL) 322.75p -0.69%

BATM Advanced Communications Ltd. (BVC) 20.00p -0.62%