London close: FTSE 100 ends lower as investors weigh data, earnings
A surprise slowdown in UK construction activity growth and concerns over Greece weighed on sentiment on Tuesday with the FTSE finishing in the red.
The Markit/CIPS purchasing mangers’ index on UK construction activity fell to 57.1 in July from 58.1 a month earlier, missing forecasts for a reading of 58.5. A reading above 50 indicates expansion while a number below that signals a contraction.
“July’s growth slowdown is the first for three months and perhaps a sign that the post-election impact on construction confidence has started to diminish,” said Markit’s senior economist, Tim Moore.
Earlier, a report from Nationwide showed UK house prices rose 3.5% year-on-year in July, as expected, accelerating from the previous month’s 3.3% gain. Compared to a month ago, prices increased 0.4% in July, in line with forecasts, following a 0.2% drop in June. “We currently expect house prices to rise by 6% in 2015 and then by a further 5% in 2016,” said Howard Archer, chief economist at IHS Global Insight.
However, Archer said housing market activity and prices are expected to be constrained by more stretched house prices to earnings ratios, tighter checking of prospective mortgage borrowers by lenders and the likelihood that interest rates will soon start rising gradually.
Meanwhile, the Athens General Index dropped for a second day after falling as much as 23% on Monday on concerns over the country’s bailout talks and economy. Greek government spokeswoman Olga Gerovasili said Athens expects to conclude the bailout deal with creditors by 18 August. The drafting of the accord begins on Wednesday, she told the Skai TV station.
Stateside, a report on factory orders showed a 1.8% increase in June, as expected, after a 1.1% drop a month earlier.
Company news
Shire was leading the fallers as the Dublin-headquartered pharmaceuticals group made a hostile takeover approach for US immune deficiencies specialist Baxalta at roughly $30.6bn, only a month after it was spun out by Baxter International.
Royal Bank of Scotland recovered in afternoon trade from an earlier decline as the government sold a 5.4% stake in the part-owned state bank.
Standard Life slipped after the insurer reported a drop in first half revenue, blaming market volatility. Meggitt gained after posting a 6% rise in underlying first-half pre-tax profit as stronger-than-expected military revenue offset challenging conditions in the energy market, and announced two contract wins.
Smiths Group advanced after it emerged that US activist hedge fund ValueAct is a shareholder. According to the Financial Times, ValueAct’s stake in Smiths is below the 5% required for disclosure to the London Stock Exchange.
ARM Holdings edged lower after announcing a reshuffling of the board with Stephen Pusey and Lawton Fitt appointed as independent non-executive directors.
Direct Line Insurance Group climbed as it reported a rise in pre-tax profit for the first half and raised its interim dividend.
Market Movers
techMARK 3,199.31 -0.13%
FTSE 100 6,686.57 -0.03%
FTSE 250 17,734.43 +0.36%
FTSE 100 - Risers
Meggitt (MGGT) 501.00p +7.93%
Smiths Group (SMIN) 1,200.00p +4.44%
Old Mutual (OML) 219.20p +2.81%
Direct Line Insurance Group (DLG) 375.80p +2.68%
Mondi (MNDI) 1,583.00p +2.59%
BHP Billiton (BLT) 1,159.00p +1.93%
Fresnillo (FRES) 645.00p +1.90%
GKN (GKN) 321.70p +1.71%
Sports Direct International (SPD) 811.50p +1.63%
Rio Tinto (RIO) 2,470.50p +1.56%
FTSE 100 - Fallers
Shire Plc (SHP) 5,395.00p -5.85%
Coca-Cola HBC AG (CDI) (CCH) 1,268.00p -5.65%
ARM Holdings (ARM) 948.50p -4.53%
Standard Life (SL.) 439.70p -3.26%
Standard Chartered (STAN) 952.60p -2.21%
Barclays (BARC) 282.15p -2.10%
Rolls-Royce Holdings (RR.) 824.00p -2.02%
Travis Perkins (TPK) 2,217.00p -1.90%
Ashtead Group (AHT) 950.00p -1.55%
International Consolidated Airlines Group SA (CDI) (IAG) 545.50p -1.00%
FTSE 250 - Risers
Vedanta Resources (VED) 402.00p +5.13%
Saga (SAGA) 215.80p +4.25%
Renishaw (RSW) 2,186.00p +4.10%
Man Group (EMG) 172.60p +3.54%
UDG Healthcare Public Limited Company (UDG) 517.00p +3.30%
Synthomer (SYNT) 332.00p +2.79%
Rotork (ROR) 222.00p +2.78%
Auto Trader Group (AUTO) 354.00p +2.73%
Redefine International (RDI) 52.10p +2.56%
Virgin Money Holdings (UK) (VM.) 447.60p +2.52%
FTSE 250 - Fallers
Lonmin (LMI) 44.90p -8.37%
Foxtons Group (FOXT) 241.80p -4.05%
Bank of Georgia Holdings (BGEO) 1,920.00p -3.86%
Just Eat (JE.) 423.00p -3.38%
Ladbrokes (LAD) 107.00p -3.34%
Aggreko (AGK) 1,169.00p -2.99%
Aveva Group (AVV) 2,103.00p -2.68%
Euromoney Institutional Investor (ERM) 1,054.00p -2.23%
Petrofac Ltd. (PFC) 849.50p -1.79%
SSP Group (SSPG) 305.20p -1.77%
FTSE TechMARK - Risers
Dialight (DIA) 556.00p +2.02%
BATM Advanced Communications Ltd. (BVC) 17.00p +1.49%
XP Power Ltd. (DI) (XPP) 1,688.00p +1.23%
KCOM Group (KCOM) 95.75p +1.06%
Consort Medical (CSRT) 923.00p +0.65%
Ricardo (RCDO) 919.50p +0.49%
Sepura (SEPU) 155.50p +0.32%
Anite (AIE) 125.75p +0.20%
E2V Technologies (E2V) 224.75p +0.11%
FTSE TechMARK - Fallers
Torotrak (TRK) 6.57p -4.64%
SDL (SDL) 386.00p -3.62%
Oxford Biomedica (OXB) 8.70p -2.90%
Skyepharma (SKP) 279.50p -0.89%
Innovation Group (TIG) 32.50p -0.76%
Oxford Instruments (OXIG) 915.00p -0.54%
Spirent Communications (SPT) 94.25p -0.26%
NCC Group (NCC) 233.75p -0.11%