Date: Monday 02 Jul 2012
- Markets eye BoE and ECB policy decisions
- US ISM data disappoints
- Chinese, UK PMIs beat expectations
The FTSE 100 finished near its best levels of the day on Monday as investors shrugged off disappointing US economic data and looked ahead to upcoming policy decisions in Europe and the UK with optimism.
The Institute of Supply Management (ISM) saw its US manufacturing purchasing managers' index (PMI) fell from 53.5% to a worse-than-expected 49.7% in June, “indicating contraction in the manufacturing sector for the first time since July 2009, when the PMI registered 49.2%,” the ISM. Analysts at Barclays Capital said: “We believe the weakness in Europe is weighing on the manufacturing sector, but that increasing domestic demand is likely to keep the overall economy growing.”
Economic data from Asia helped to lift sentiment early on: China's PMI fell from 50.4 to 50.2 last month, according to the National Bureau of Statistics and China Federation of Logistics and Purchasing, beating forecasts of around 49.9; while Japan's Tankan manufacturers' sentiment survey improved from minus four to minus one in the second quarter, compared to expectations of an unchanged reading.
The Eurozone’s unemployment rate rose to 11.1% in May, in line with estimates and the highest since the creation of the Eurozone, according to the latest data from the region’s statistics office, Eurostat.
In domestic news, UK manufacturing PMI rose from 45.9 to 48.6 in June, well ahead of expectations of 46.5. However, with the sector still contracting (readings below 50 points), the pressure is mounting for the Bank of England to ramp up its asset purchase programme on Thursday when it announces its July policy decision.
Also on Thursday, the European Central Bank (ECB) is anticipated to slash its main refinancing rate to a record-low 0.75%, compared with the current 1% level. 48 of the 71 economists surveyed by Reuters expect a reduction.
Shares in Aviva leapt following reports which emerged over the weekend which are saying the insurance giant is set to sell or wind down between 10 and 15 of its 58 businesses.
Oilfield services group Petrofac was advancing after Goldman Sachs raised its target price on the stock from 2,216p to 2,362p and retained a ‘buy’ recommendation.
Barclays, the bank which last week was given a £290m fine for manipulating interbank lending rates, was another high riser today after revealing that its Chairman Macrus Agius has resigned. Investec analyst Ian Gordon urged investors to take advantage of the stock's recent underperformance.
Royal Bank of Scotland (RBS) was also higher despite Oriel Securities downgrading its rating on the stock to 'hold'. It was revealed at the weekend that the bank had sacked several traders last year over the alleged manipulation of LIBOR.
Serco, the international services company, rose after it signed an agreement to dispose of most of its operations in Germany in a transaction with the local management team.
Oil and gas group SOCO International surged after entering into a 'conditional' agreement with Lizeroux Oil & Gas to acquire the 20% minority interest in SOCO Vietnam that the group does not already own.
Insurance group Catlin fell after Jefferies downgraded the stock as part of its review into the European insurance industry: "With Catlin now close to our price target, we downgrade to 'hold' also noting higher end US windstorm exposure and a broadly untouched reinsurance deductible."
FTSE 100 - Risers
Aviva (AV.) 282.70p +3.71%
Petrofac Ltd. (PFC) 1,437.00p +3.53%
Barclays (BARC) 168.40p +3.41%
WPP (WPP) 796.00p +2.98%
Whitbread (WTB) 2,087.00p +2.91%
Schroders (SDR) 1,370.00p +2.54%
BP (BP.) 432.50p +2.50%
Standard Chartered (STAN) 1,419.00p +2.49%
Eurasian Natural Resources Corp. (ENRC) 425.60p +2.46%
Reckitt Benckiser Group (RB.) 3,446.00p +2.41%
FTSE 100 - Fallers
Admiral Group (ADM) 1,169.00p -1.93%
British Sky Broadcasting Group (BSY) 687.50p -1.29%
Evraz (EVR) 258.50p -0.84%
Vedanta Resources (VED) 906.00p -0.66%
International Consolidated Airlines Group SA (CDI) (IAG) 158.60p -0.56%
Pearson (PSON) 1,262.00p -0.32%
Capital Shopping Centres Group (CSCG) 321.20p -0.25%
Next (NXT) 3,195.00p -0.12%
Johnson Matthey (JMAT) 2,207.00p -0.05%
Tate & Lyle (TATE) 647.50p 0.00%
FTSE 250 - Risers
Soco International (SIA) 309.40p +6.91%
Imagination Technologies Group (IMG) 496.60p +6.43%
Fenner (FENR) 382.90p +5.98%
Big Yellow Group (BYG) 307.20p +5.93%
Aquarius Platinum Ltd. (AQP) 48.12p +5.39%
Oxford Instruments (OXIG) 1,291.00p +5.22%
Travis Perkins (TPK) 1,021.00p +5.20%
SIG (SHI) 101.80p +5.17%
Shanks Group (SKS) 80.00p +4.78%
Ashtead Group (AHT) 272.00p +4.66%
FTSE 250 - Fallers
Avocet Mining (AVM) 77.10p -14.38%
Ocado Group (OCDO) 75.00p -3.47%
Halfords Group (HFD) 223.80p -2.36%
Man Group (EMG) 74.45p -2.23%
Homeserve (HSV) 153.60p -1.54%
Spirit Pub Company (SPRT) 50.00p -1.48%
London & Stamford Property (LSP) 110.30p -1.25%
Ruspetro (RPO) 133.50p -1.18%
Bumi (BUMI) 310.00p -1.12%
Yule Catto & Co (YULC) 143.40p -1.10%
or share it with one of these popular networks:
You are here: news