London midday: Stocks decline after UK services PMI

UK services sector growth accelerated in March but remained subdued, according to a survey by Markit/CIPS.

The purchasing managers’ index rose to 53.7 last month from 52.7 in February, beating forecasts of 53.4 and above the 50 level that separates an expansion from a contraction.

However, Markit said the improvement was “insufficient to prevent the data from indicating a slowdown in economic growth in the first quarter”.

“At 53.7, the weighted average output index from the three surveys was up from 52.9 in February, when the index sank to the greatest extent for four-and-a-half years,” said Chris Williamson, chief economist at Markit.

“The resulting first quarter average PMI reading is consequently the lowest since the second quarter of 2013.”

Earlier, Markit’s Eurozone services PMI was revised down to 53.1 in March from a previous estimate of 54.0. It compared to a reading of 53.3 in February and forecasts of 54.0.

Still to come, Markit will release its US services PMI at 1445 BST while ISM publishes its non-manufacturing services composite at 1500 BST.

Meanwhile, a record of the Bank of England’s Financial Policy Committee’s 23 March meeting revealed policymakers will review again whether to tighten capital requirements for banks more rapidly after the result of Britain's vote on European Union membership is known in June.

In Germany, a report revealed factory orders rose 0.5% in February compared to the same month a year ago, missing expectations for 2.2% growth.

Across the Atlantic, Chicago Federal Reserve President Charles Evans said in Hong Kong that the central bank has to be proactive and aggressive to reach its 2% target. The Fed's preferred annual measure of inflation came in flat at 1.7% in February.

In commodities, oil prices remained under pressure on doubts that global crude producers would reach an agreement to freeze production at a meeting on 17 April. Saudi Arabia said on Friday it would only freeze production if Iran follows suit. Iran has ruled out freezing output until its production recovers to levels seen before its sanctions.

At 1159 BST, Brent crude slid 0.31% to $37.57 per barrel and West Texas Intermediate declined 0.16% to $35.64 per barrel.

On the company front, Moss Bros Group’s shares gained after the menswear retailer posted a rise in full year profit and sounded an upbeat note on current trading.

Electrocomponents jumped after saying it expected full year profits to hit the top end of market expectations, following a solid fourth quarter in which the UK recovery gained pace.

Card Factory edged higher after reporting its full year pre-tax profit almost doubled to £83.7m, driven by strong sales and new store openings.

Motoring services company the AA fell after it said revenue slipped 0.4% to £968m in the 12 months to 31 January.

Mining stocks were the biggest fallers including BHP Billiton, Glencore, Anglo American and Rio Tinto amid concerns about the global economy and falling commodities prices.

Banks were under the cosh on the prospect of tighter capital rules, including Standard Chartered, Barclays and Royal Bank of Scotland.

Tesco was lower after Deutsche Bank downgraded its stance on the stock to ‘hold’ from ‘buy’ with an unchanged price target of 210p. Research by Kantar Worldpanel also revealed the supermarket, along with J Sainsbury, had lost market share to rivals.

Research for the 12 weeks ended 27 March showed Sainsbury's was the only one of the Big Four supermarkets to generate growth with sales up 1.2%. Sales at Tesco fell 0.2%, Morrisons slid 2.4% and Asda's sales were 3.9% lower.

Housebuilders rallied after a poll by OBR showed 51% of Britons planned on voting to remain in the EU at the 23 June referendum. Berkeley Group Holdings, Persimmon and Taylor Wimpey were among the biggest risers.

Market Movers

FTSE 100 (UKX) 6,072.54 -1.50%
FTSE 250 (MCX) 16,700.04 -0.86%
techMARK (TASX) 3,096.86 -1.14%

FTSE 100 - Risers

Berkeley Group Holdings (The) (BKG) 3,259.00p 1.81%
Randgold Resources Ltd. (RRS) 6,285.00p 1.29%
Persimmon (PSN) 2,131.00p 1.14%
Worldpay Group (WI) (WPG) 279.80p 0.65%
Taylor Wimpey (TW.) 191.80p 0.47%
Severn Trent (SVT) 2,171.00p 0.42%
London Stock Exchange Group (LSE) 2,801.00p 0.39%
Reckitt Benckiser Group (RB.) 6,753.00p 0.28%
InterContinental Hotels Group (IHG) 2,861.00p 0.25%
Imperial Brands (IMB) 3,851.50p 0.23%

FTSE 100 - Fallers

Anglo American (AAL) 517.60p -5.46%
Glencore (GLEN) 142.35p -4.97%
BHP Billiton (BLT) 732.30p -4.86%
Standard Chartered (STAN) 432.05p -4.42%
Barclays (BARC) 144.75p -3.66%
Rio Tinto (RIO) 1,903.50p -3.64%
Royal Bank of Scotland Group (RBS) 208.80p -3.38%
Shire Plc (SHP) 4,060.00p -3.33%
Royal Dutch Shell 'B' (RDSB) 1,635.50p -3.31%
Royal Dutch Shell 'A' (RDSA) 1,624.00p -3.19%

FTSE 250 - Risers

Electrocomponents (ECM) 262.20p 8.08%
Card Factory (CARD) 340.00p 3.19%
Jimmy Choo (CHOO) 129.60p 2.94%
Ibstock (IBST) 205.00p 2.45%
Rank Group (RNK) 250.10p 2.33%
DFS Furniture (DFS) 318.10p 1.96%
Pets at Home Group (PETS) 262.70p 1.82%
PayPoint (PAY) 762.00p 1.67%
Lookers (LOOK) 156.60p 1.49%
Zoopla Property Group (WI) (ZPLA) 245.50p 1.36%

FTSE 250 - Fallers

Allied Minds (ALM) 419.20p -7.64%
Weir Group (WEIR) 1,015.00p -5.67%
Amec Foster Wheeler (AMFW) 417.60p -4.81%
Aberdeen Asset Management (ADN) 264.10p -4.14%
Vedanta Resources (VED) 328.20p -3.75%
Evraz (EVR) 87.40p -3.74%
Victrex plc (VCT) 1,568.00p -3.21%
Sophos Group (SOPH) 208.20p -3.16%
International Personal Finance (IPF) 277.60p -3.07%
ICAP (IAP) 462.20p -2.92%