- FTSE closes 0.48 points lower at 6,820.56
- SABMiller leads risers, Royal Mail at bottom of pile
- Household spending drives rise in GDP
techMARK 2,744.10 +0.32%
FTSE 100 6,820.56 -0.01%
FTSE 250 15,675.09 +0.46%
Blue chips ended today's session flat, tipping marginally into negative territory in the final minute or two of trading.
Investors weighed a strong set of results from SABMiller, a negative reaction to Royal Mail's outlook, upbeat Chinese manufacturing PMI data, a rise in UK gross domestic product (GDP) and a positive start to the day over in the US.
The top tier index has closed 0.48 points lower at 6,820.56.
Chris Beauchamp, Market Analyst at IG, said: "The FTSE 100 has endured something of a seesaw day, hopping between gains and losses, but the overall impression has been of a market in a more relaxed frame of mind than was the case earlier in the week.
"Chinese data, which when positive always provides a useful tonic, provided support for the mining sector, rallying on hopes of increased consumption and helping to allay fears about weaker growth. Adding spice to the day was some bid talk in the tobacco arena, providing the wider market with a reason to remain in positive territory."
It was revealed today that household spending drove an expected rise in GDP in the first three months of the year, according to the Office for National Statistics (ONS), which confirmed earlier estimates that the economy expanded by 0.8% between January and April.
An 0.8% rise in household consumption, double the pace of the previous quarter, provided most of the 0.8% increase in GDP.
GDP was estimated to have increased by 1.7% in 2013, compared with 2012, un-revised from the preliminary calculations published on April 29th.
Meanwhile, the ONS also reported that public sector net borrowing requirement, excluding financial interventions, worsened to £7.4bn in April, versus the £4.5bn deficit forecast by analysts.
The tally was £1.7bn higher than in the same month of the previous year.
Positive surprise in China May manufacturing PMI survey figures
China registered a surprise increase in business activity in the manufacturing sector that nevertheless led analysts to consider that the central bank would continue to show an easing bias.
The HSBC manufacturing purchasing managers' index for May unexpectedly rose to 49.7 when consensus had expected the reading to remain unchanged at 48.1.
In other global macro news, US existing home sales reached an annualised rate of 4.65m in April, down from the 4.59m pace seen in the month before.
The consensus estimate had been for a print of 4.69m.
Meanwhile, initial unemployment claims for the week ended on May 17th increased by 28,000 to reach 326,000, according to the Department of Labour. The consensus estimate had been for a reading of 310,000.
SABMiller bubbles fizzes up on annual results
A taste for lager among drinkers in emerging markets helped brewing group SABMiller to add fizz to annual adjusted profits, although volumes declined in Europe and North America. SABMiller, whose brands include Peroni, Pilsner Urquell and Grolsch, said strong demand in Latin America, Africa and China drove a 1% rise in lager volumes, although that was partially offset by declines in Europe and North America.
Buoyed by the data from China, Fresnillo and Randgold Resources both tracked gold and silver prices higher, while Antofagasta shareholders were encouraged by a rise in the price of copper futures.
ARM Holdings climbed after the group yesterday gave a positive outlook for its royalty growth rates in the next three to four years at its analysts day.
Meanwhile, Royal Mail fell into the bottom spot after it warned on future competitive pressures and despite posting solid numbers. But Panmure Gordon was one of several brokers to reiterate a 'hold' recommendation on the shares. Analyst Gert Zonneveld said longer term prospects remained attractive and he expected "an element of regulatory intervention to protect RMG's need to achieve a commercial return on its activities".
However, he noted: "The company is facing a number of headwinds. The competitive market on the parcels side is more intense and the company is taking steps to remain leader in this growing market [...] On the letters front, direct delivery is the main concern."
Royal Dutch Shell fell after announcing it will cancel its popular scrip dividend programme from the current quarter, which analysts said was a "high-profile source of embarrassment". The oil giant said the cancellation meant the second quarter interim dividend and future dividends, forecast at $11.8bn for the full year, will be settled entirely in cash, rather than offering a share-based alternative, resulting in "a more efficient share buy-back programme".
AstraZeneca fell even though reports emerged that its largest shareholder had ratcheted up the pressure on its board to engage with Pfizer over a possible sale. US private equity group BlackRock, which holds an 8% stake in the pharmaceuticals group, is understood to support the Anglo-Swedish outfit's decision not to accept its rival's £55-share offer.
FTSE 100 - Risers
SABMiller (SAB) 3,372.00p +3.45%
ARM Holdings (ARM) 889.50p +3.31%
Aberdeen Asset Management (ADN) 440.00p +2.56%
Sports Direct International (SPD) 769.00p +2.40%
Smith & Nephew (SN.) 956.00p +2.14%
Antofagasta (ANTO) 786.00p +1.95%
Whitbread (WTB) 4,149.00p +1.89%
Fresnillo (FRES) 845.00p +1.87%
Petrofac Ltd. (PFC) 1,240.00p +1.64%
Compass Group (CPG) 1,002.00p +1.62%
FTSE 100 - Fallers
Royal Mail (RMG) 519.00p -9.74%
Royal Dutch Shell 'B' (RDSB) 2,456.50p -3.72%
AstraZeneca (AZN) 4,275.00p -3.28%
BG Group (BG.) 1,234.00p -2.18%
RSA Insurance Group (RSA) 481.70p -1.97%
SSE (SSE) 1,542.00p -1.15%
Unilever (ULVR) 2,668.00p -1.00%
Marks & Spencer Group (MKS) 447.80p -0.99%
IMI (IMI) 1,527.00p -0.78%
Reckitt Benckiser Group (RB.) 5,040.00p -0.59%
FTSE 250 - Risers
Halfords Group (HFD) 488.00p +10.56%
Imagination Technologies Group (IMG) 220.70p +5.45%
Entertainment One Limited (ETO) 284.70p +5.25%
BTG (BTG) 547.00p +4.99%
Ocado Group (OCDO) 333.30p +4.16%
Oxford Instruments (OXIG) 1,256.00p +3.97%
3i Group (III) 420.50p +3.83%
Playtech (PTEC) 629.50p +3.71%
CSR (CSR) 565.50p +3.29%
Countrywide (CWD) 548.00p +3.20%
FTSE 250 - Fallers
Dairy Crest Group (DCG) 427.90p -6.98%
Polymetal International (POLY) 510.50p -5.99%
Telecom Plus (TEP) 1,463.00p -3.69%
Mitchells & Butlers (MAB) 413.30p -3.19%
Booker Group (BOK) 138.00p -3.09%
Electrocomponents (ECM) 280.60p -2.91%
Supergroup (SGP) 984.00p -2.77%
RPS Group (RPS) 287.30p -2.71%
COLT Group SA (COLT) 137.00p -2.00%
Lancashire Holdings Limited (LRE) 613.50p -1.84%