- Markets pare early losses but still trading lower
- Weak Chinese data weighs on mining stocks
- FOMC minutes prompt rate hike fears
- BAE, Rexam fall sharply after 2013 results
techMARK 2,861.08 -0.50%
FTSE 100 6,777.54 -0.28%
FTSE 250 16,246.72 -0.62%
UK markets were trading in the red on Thursday morning with BAE Systems and Rexam leading the decline after their annual results disappointed, while mining stocks were being weighed down by yet more disappointing data from top metals consumer China.
The FTSE 100 was registering a 0.3% fall to 6,778 by midday, but had pared losses after hitting an intraday low of 6,732.03 early on.
Investors gave a negative reaction to data from China this morning which showed that activity in the manufacturing sector weakened to a seven-month low. The HSBC/Markit 'flash' China manufacturing purchasing managers' index (PMI) for February fell further into contraction, slipping to 48.3 from 49.5; analysts had expected no change.
"While it is largely excepted that Chinese growth will slow, economic reform and mixed data signals is making any forecasting hopelessly opaque and given the miners dependency on Chinese consumption that is making them less attractive to long-term investment," said Toby Morris, Senior Sales Trader at CMC Markets.
The Eurozone composite PMI also failed to impress, falling to 52.7 from 52.9 in February, surprising analysts who had expected a small increase to 53.1. Activity in the region's second-largest economy, France, contracted further during the month, offsetting growth from Germany.
Japan was also making headlines after recording its biggest trade deficit in history in January of 2.79tn yen. Meanwhile, investors were keeping an eye on ongoing political instability and protests in Thailand, Venezuela and in particular Ukraine.
Over in the States, stock futures were pointing to a weak start on Wall Street as markets continue to digest last night's minutes from the latest Federal Reserve policy meeting. At the January 28-29th meeting, the central bank re-affirmed its commitment to continue tapering stimulus in "measured steps". In fact, some policymakers even suggested raising interest rates "relatively soon".
BAE, Rexam, mining stocks fall
Military hardware manufacturer BAE Systems slumped after reporting a 3% increase in operating profits to £1.9bn for 2013, but warned that profits could fall by up to 10% on the back of pressures on US government spending.
Packaging group Rexam also dropped after missing analysts' estimates slightly with its 2013 results. The company underwhelmed after saying it expects to make "further progress" in 2014, but only on a constant currency basis.
FTSE 100 mining peers Fresnillo, Anglo American, Randgold, Glencore Xstrata and Rio Tinto were all trading in the red after the Chinese data. FTSE 250 groups Vedanta, Polymetal and African Barrick Gold also suffered heavy losses.
Supermarket group WM Morrison was pulling back after strong gains yesterday as speculation surrounding a possible private-equity buyout continued to do the rounds.
RBS was lower after Investec downgraded the stock to 'sell', recommending investors to reinstate short positions ahead of the bank's results next week.
On a positive note, Petrofac surged after the oilfield services firm won a £1.2bn contract from BP to build a gas processing facility in Oman.
William Hill was also higher after both Goldman Sachs and Exane BNP Paribas upgraded their ratings on the stock to 'buy' and 'outperform', respectively.
Playtech jumped as it reported a rise in annual earnings as the gaming software development company signed two landmark deals with Ladbrokes to revamp the bookmarker's digital offering until 2017.
FTSE 100 - Risers
William Hill (WMH) 354.50p +2.52%
Petrofac Ltd. (PFC) 1,363.00p +2.48%
Vodafone Group (VOD) 227.40p +1.81%
Centrica (CNA) 319.10p +1.62%
Sainsbury (J) (SBRY) 352.80p +1.35%
Severn Trent (SVT) 1,817.00p +1.23%
BP (BP.) 499.15p +0.84%
Associated British Foods (ABF) 2,935.00p +0.69%
SSE (SSE) 1,407.00p +0.57%
Sports Direct International (SPD) 771.00p +0.52%
FTSE 100 - Fallers
BAE Systems (BA.) 400.60p -8.29%
Rexam (REX) 500.00p -4.67%
Fresnillo (FRES) 960.50p -3.18%
Anglo American (AAL) 1,542.00p -2.96%
Aberdeen Asset Management (ADN) 384.90p -2.56%
Glencore Xstrata (GLEN) 339.90p -2.29%
Randgold Resources Ltd. (RRS) 4,731.00p -2.21%
Rio Tinto (RIO) 3,555.50p -1.98%
SABMiller (SAB) 2,762.00p -1.94%
GKN (GKN) 405.80p -1.91%
FTSE 250 - Risers
Playtech (PTEC) 801.50p +8.16%
Essar Energy (ESSR) 63.45p +2.17%
Wood Group (John) (WG.) 740.00p +2.00%
Premier Oil (PMO) 296.50p +1.75%
Home Retail Group (HOME) 184.70p +1.71%
Petra Diamonds Ltd.(DI) (PDL) 159.00p +1.53%
De La Rue (DLAR) 805.00p +1.51%
Perform Group (PER) 220.00p +1.38%
Moneysupermarket.com Group (MONY) 178.40p +1.36%
Telecity Group (TCY) 676.00p +1.35%
FTSE 250 - Fallers
Vedanta Resources (VED) 852.50p -6.32%
Evraz (EVR) 77.60p -5.83%
Smith (DS) (SMDS) 334.80p -4.53%
Essentra (ESNT) 854.00p -4.47%
Polymetal International (POLY) 635.50p -3.71%
African Barrick Gold (ABG) 266.80p -3.12%
Ferrexpo (FXPO) 158.90p -3.11%
Lonmin (LMI) 312.50p -3.10%
Cobham (COB) 286.50p -2.88%
Informa (INF) 515.00p -2.83%