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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London open: Stocks open lower on weak Chinese manufacturing data UK stocks opened in the red on Tuesday after weak Chinese manufacturing data fuelled concerns about the world's second largest economy.
The official purchasing managers' index for China manufacturing activity fell to 49.7 in August from the previous month's reading of 50. A figure below 50 signals a contraction in the sector while a level above that indicates expansion.
The Caixan PMI was unexpectedly revised upwards to 47.3 in August from the previous estimate of 47.1 but the figure still revealed a contraction.
"Concerns about Chinese growth as well as the prospect of a US rate rise have seen European markets come off their worst monthly performance since 2011, though that does have to be tempered somewhat by last week's strong rebound, as China cut rates further while senior Fed official and new York Fed President Bob Dudley suggested a September rate rise was now 'less compelling' than previously thought," said Michael Hewson, chief market analyst at CMC Markets UK.
"Even the Atlanta Fed's Dennis Lockhart softened his earlier rhetoric about a September rate rise hinting he may be having second thoughts given recent market volatility."
However, over the weekend Deputy Fed Chairman Stanley Fisher indicated that the central bank is looking to increase rates as soon as possible as there is good reason to suggest inflation would rise towards the 2% target.
On an upbeat note for the markets, Monday data showed German retail sales rose 3.3% in July compared to a year ago, exceeding expectations for a 1.7% increase.
Eurozone inflation remained unchanged at 0.2% year-on-year growth in August, Eurostat revealed on Monday, compared to forecasts of 0.1% but well below the European Central Bank's target of just below 2%.
Turning to Tuesday's agenda, UK manufacturing PMI is due at 0930 BST while Eurozone jobs data will be released at 1000 BST. In the US, Markit's final estimate of manufacturing activity is out at 1445 BST, construction spending will be published at 1500 BST and ISM's manufacturing report comes at 1500 BST.
Meanwhile, oil prices dropped nearly $2 a barrel shortly after Brent and West Texas Intermediate crude jumped more than 8% in the previous session.
WTI had soared 27.5% by the end of three days of gains on the previous session, the biggest three-day increase in dollar terms since February 2011. The rally came after OPEC said the cartel was willing to talk to other producers to achieve reasonable oil prices. A downward revision of US output data by the US Energy Information Administration also boosted prices.
At 0835 BST on Tuesday WTI was down 3% to $47.75 per barrel, while Brent fell 2.2% to $52.96.
On the company front, Shire slumped as the company's chief executive vowed to cut $1bn of costs if a deal to buy Baxalta goes through.
Astrazeneca was also lower as the company entered into a collaboration agreement with Valeant Pharmaceuticals International under which it will grant an exclusive licence for Valeant to develop and commercialise psoriasis drug brodalumab.
Bwin.Party Digital Entertainment dropped following reports the gambling group received a revised proposal from 888 Holdings, which it is evaluating along with the offer received from GVC Holdings and said it intends to consult with its shareholders in the coming days before making a decision.
Rentokil Initial gained as it reached an agreement to buy US-based The Steritech Group for $425m in cash to accelerate the growth of its pest control business.
Inmarsat surged as the satellite telecoms group confirmed the successful launch into orbit of the I-5 F3 Global Xpress satellite. |
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| | Market Movers
techMARK 3,061.18 -1.23%
FTSE 100 6,161.33 -1.39%
FTSE 250 16,919.62 -1.09%
FTSE 100 - Risers
Inmarsat (ISAT) 994.50p +1.38%
Admiral Group (ADM) 1,558.00p +0.52%
Royal Dutch Shell 'A' (RDSA) 1,701.50p +0.38%
TUI AG Reg Shs (DI) (TUI) 1,160.00p +0.35%
Royal Dutch Shell 'B' (RDSB) 1,709.00p +0.15%
RSA Insurance Group (RSA) 514.50p +0.10%
FTSE 100 - Fallers
Shire Plc (SHP) 4,860.00p -3.28%
Old Mutual (OML) 194.00p -3.10%
Persimmon (PSN) 2,043.00p -2.85%
GKN (GKN) 283.80p -2.71%
Mondi (MNDI) 1,439.00p -2.64%
Burberry Group (BRBY) 1,374.00p -2.62%
ARM Holdings (ARM) 909.50p -2.57%
Dixons Carphone (DC.) 420.50p -2.53%
Morrison (Wm) Supermarkets (MRW) 164.50p -2.37%
Standard Chartered (STAN) 747.40p -2.30%
FTSE 250 - Risers
St. Modwen Properties (SMP) 458.20p +2.60%
Restaurant Group (RTN) 679.50p +1.95%
Cobham (COB) 286.80p +1.85%
Nostrum Oil & Gas (NOG) 498.80p +1.82%
Tullow Oil (TLW) 226.70p +1.57%
Rentokil Initial (RTO) 150.40p +1.42%
Redefine International (RDI) 53.50p +1.42%
Lookers (LOOK) 164.00p +1.23%
Vectura Group (VEC) 173.90p +1.10%
Ophir Energy (OPHR) 97.90p +1.08%
FTSE 250 - Fallers
Rotork (ROR) 196.90p -5.83%
Henderson Group (HGG) 246.00p -5.17%
Indivior (INDV) 213.20p -4.61%
Man Group (EMG) 154.30p -4.22%
Acacia Mining (ACA) 232.00p -3.05%
Grainger (GRI) 228.40p -3.01%
Fidessa Group (FDSA) 1,822.00p -2.98%
Virgin Money Holdings (UK) (VM.) 412.20p -2.92%
RPC Group (RPC) 637.50p -2.89%
FirstGroup (FGP) 105.90p -2.84%
FTSE TechMARK - Risers
UCW Limited (UCW) A$0.01 +7.14%
Innovation Group (TIG) 39.50p +1.94%
Sepura (SEPU) 170.00p +1.19%
NCC Group (NCC) 232.25p +0.76%
FTSE TechMARK - Fallers
Oxford Biomedica (OXB) 7.70p -5.52%
Sarossa (SARS) 1.76p -4.09%
Skyepharma (SKP) 316.75p -2.61%
SDL (SDL) 376.25p -1.70%
Oxford Instruments (OXIG) 826.00p -1.67%
E2V Technologies (E2V) 226.94p -1.55%
Consort Medical (CSRT) 942.00p -0.69%
KCOM Group (KCOM) 93.50p -0.53%
Spirent Communications (SPT) 78.00p -0.32% |
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| | UK Event Calendar | | Tuesday 01 September
INTERIMS
Globaltrans Investment GDR (Reg S), Snoozebox Holdings, STM Group
QUARTERLY PAYMENT DATE
JPMorgan Claverhouse Inv Trust
QUARTERLY EX-DIVIDEND DATE
Schlumberger Ltd.
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Construction Spending (US) (15:00)
ISM Manufacturing (US) (15:00)
ISM Prices Paid (US) (15:00)
PMI Manufacturing (EU) (09:00)
Unemployment Rate (EU) (10:00)
Unemployment Rate (GER) (08:55)
GMS
Guscio
FINALS
CAP-XX Limited
EGMS
B.S.D Crown Ltd (DI)
AGMS
Energy Assets Group, Redcentric, United Cacao Limited (DI)
UK ECONOMIC ANNOUNCEMENTS
Consumer Credit (09:30)
M4 Money Supply (09:30)
M4 Sterling Lending (09:30)
Mortgage Approvals (09:30)
PMI Manufacturing (09:30)
FINAL DIVIDEND PAYMENT DATE
Iomart Group
|
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Equities drop following weak Chinese manufacturing data European stocks fell on Tuesday, kicking the new month off on a downbeat note as weak Chinese manufacturing data exacerbated concerns of a slowdown in the world's second-largest economy.
At 0840 BST, the benchmark Stoxx Europe 600 index was down 1.6%, France's CAC 40 was 1.5% weaker and Germany's DAX was down 1.9%. In terms of sector, basic resources - which are highly dependent on demand from China - suffered heavy losses, with the Stoxx 600 sub-index down 1.9%.
The official Chinese manufacturing sector purchasing managers' index fell to a three-year low of 49.7 in August from a print of 50 the month before, while the Caixin China manufacturing PMI hit a six-and-a-half year low of 47.3.
"This first sub-50 official PMI reading in six months is consistent with the declining Caixin PMI and points to weakening growth momentum in August," said Nomura. "We expect policy to remain accommodative, with additional fiscal stimulus efforts in H2 to boost infrastructure investment and one more 50 basis points reserve requirement ratio cut in Q4."
The Shanghai Composite index and the Hang Seng both fell 1.2%, while the Nikkei slumped 3.8%.
Although the figures were pretty much in line with expectations, they merely served to compound worries that the Chinese economy is running out of steam.
"Another batch of weak economic data out of China solidified fears that the production lines in China's factories are coming to a shuddering halt. With traders now completely losing faith in the once miraculous growth story of the Asian behemoth, it's a question of whether China has a slow contraction or does a swan dive off the economic cliff," said Jonathan Sudaria, night dealer at London Capital Group.
On the corporate front, shares in Man Group slumped following a press report that the hedge fund manager's chairwoman Li Yifei has been taken into custody by Chinese authorities to assist with a police probe into market volatility. |
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| | Newspaper Round Up | | Tuesday newspaper round-up: Living wage, China, North Sea Company bosses face tough new fines and disqualification under plans by David Cameron to force businesses to pay the national living wage. The prime minister says that the new, higher minimum wage, which will reach £9 an hour by the end of the decade, will work only if it is properly enforced. - The Times
Investors have been warned not to "touch China with a barge pole" as a crackdown on people accused of spreading unhelpful market rumours hit the Shanghai market again and led European markets to their worst monthly performance in four years. Hugh Young, the veteran emerging markets guru who manages £30 billion of Asian equities at Aberdeen Asset Management, warned novice investors to steer clear as he predicted that the market turmoil could continue for "at least" a few more weeks. - The Times
The North Sea's biggest gas field discovery in a decade has been approved for production by Britain's oil and gas authority, paving the way for a £3bn investment from Danish giant Maersk that could supply 5pc of UK consumption. The Culzean field is the largest to be approved since East Bray in 1990 and is expected to hold up to the equivalent of 300m barrels of oil, Maersk said on Monday. - The Daily Telegraph
Plans to introduce a national living wage will lead to more job losses than official estimates suggest unless the Chancellor lightens the burden on business, the head of the Confederation of British Industry has warned. John Cridland, director-general of Britain's biggest business lobby group, described George Osborne's proposal in the Summer Budget for a big rise in the minimum wage as the biggest challenge facing UK companies. - The Daily Telegraph
Economic growth in the UK picked up pace in the three months to August, with strong expectations by business for the next quarter, the CBI employers' body said in a report out today. However, the organisation said Britain faced some risks from the knock-on effect of the slowdown in China and other emerging markets, along with the resulting turbulence in stock markets. - Scotsman |
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