- UK stocks retreat after recent rally, US futures fall
- UK manufacturing confidence and German industrial production both retreat
- Antogasta, Anglo lead mining stocks lower
- Weir Group gains after Citigroup upgrade
techMARK 2,848.48 -0.25%
FTSE 100 6,850.83 -0.22%
FTSE 250 15,943.09 -0.67%
It was a cautious start to the week for UK markets with stocks pulling back after a recent rally which saw the FTSE 100 rise to its highest in three and a half weeks.
Despite a relatively lacklustre session on Friday, with low trading volumes attributed to the closure of the New York Stock Exchange, the UK's benchmark index still managed to finish out the week with a gain of 1.6%, helped by some much-better-than-expected data from the US labour market.
Economic indicators this morning, however, were dampening sentiment in London, sparking a small fall on the Footsie as investors scaled back risk appetite and booked profits. The FTSE 100 was trading 0.2% lower at 6,851 by midday, after rising to 6,866.05 the previous session, its highest close since June 10th.
Stock futures on Wall Street were pointing to a similarly weak start ahead of the opening bell as US traders return to their desks following the three-day weekend.
Data released today showed that UK manufacturing confidence fell in June for the first time in 14 months amid fears about rising costs and a skills shortage. The BDO Optimism Sub-Index for manufacturing, which predicts growth expectations in six months' time, fell to 119.5 in June from 121 in May, albeit above the 100 level indicating long-term growth.
Meanwhile, German industrial production contracted by 1.8% month-on-month in May, according to the Federal Statistics Office. This was worse than the downwardly-revised 0.3% decline in April and well below the consensus estimate for a fall of 0.3%.
Concerns about global economic growth were also on investors' minds after International Monetary Fund (IMF) Managing Director Christine Lagarde warned that an "investment deficit" is proving a drag on the recovery. Ahead of the IMF's update of its economic outlook expected later this month, Lagarde said that forecasts will be "very slightly different" than its last estimates in April when it predicted that the global economy will expand by 3.6% this year.
Mining stocks fall
Antofagasta led the fall in the mining sector as the stock pulled back after an 8% jump last week. Declining metals prices were weighing on basic resources shares
this morning with gold in particular retreating from a three-month high.
BHP Billiton, Rio Tinto, Glencore and Fresnillo were also trading in the red. Anglo American was lower after saying it will offload its 50% stake in UK aggregates joint venture with French group Lafarge for £885m, just a year and a half after it was formed.
Gold miner Polymetal was also being weighed down by comments from Credit Suisse which kept an 'underperform' rating on the stock, saying that the company's recent acquisition of the Kyzyl gold project in Kazakhstan hasn't changed its cautious view. The investment case is "primarily driven by our negative gold price outlook", the bank said.
Engineering group Weir was a high riser after analysts at Citigroup upgraded the stock to 'buy', hiking their target price for the shares from 2,600p to 3,100p. The bank said that Weir's opportunities in oil and gas are "underappreciated" by the market.
Drinks giant SABMiller edged lower after announcing the disposal of its near-40% interest in South African hotel and entertainment group Tsogo Sun Holdings, valued at ZAR11.7bn ($1.09bn).
UK-focused residential developer Taylor Wimpey declined despite saying it saw a reduction in "market risk" in the first half as the housing market continued to strengthen. Sales rates and pricing were at the upper end of forecasts during the first six months of the year, showing the benefit of the traditionally strong spring selling season, it said.
FTSE 100 - Risers
Weir Group (WEIR) 2,768.00p +1.95%
Friends Life Group Limited (FLG) 319.70p +0.72%
BT Group (BT.A) 390.70p +0.70%
Petrofac Ltd. (PFC) 1,233.00p +0.65%
Associated British Foods (ABF) 3,142.00p +0.54%
GlaxoSmithKline (GSK) 1,587.50p +0.54%
G4S (GFS) 263.40p +0.50%
Reckitt Benckiser Group (RB.) 5,150.00p +0.49%
Royal Dutch Shell 'B' (RDSB) 2,565.50p +0.45%
Pearson (PSON) 1,152.00p +0.44%
FTSE 100 - Fallers
Antofagasta (ANTO) 810.00p -2.06%
TUI Travel (TT.) 390.50p -1.71%
easyJet (EZJ) 1,338.00p -1.69%
Hargreaves Lansdown (HL.) 1,242.00p -1.66%
Burberry Group (BRBY) 1,435.00p -1.58%
Fresnillo (FRES) 913.50p -1.56%
Kingfisher (KGF) 356.20p -1.52%
Tullow Oil (TLW) 831.50p -1.48%
Rio Tinto (RIO) 3,245.00p -1.28%
BHP Billiton (BLT) 1,987.00p -1.19%
FTSE 250 - Risers
Serco Group (SRP) 370.80p +2.43%
CSR (CSR) 622.00p +1.97%
ITE Group (ITE) 246.80p +1.69%
Perform Group (PER) 234.00p +1.65%
Big Yellow Group (BYG) 511.50p +1.59%
Ocado Group (OCDO) 421.70p +1.35%
Man Group (EMG) 114.40p +1.33%
Balfour Beatty (BBY) 223.60p +1.27%
Bank of Georgia Holdings (BGEO) 2,481.00p +1.22%
Ladbrokes (LAD) 142.50p +1.06%
FTSE 250 - Fallers
Fidessa Group (FDSA) 2,192.00p -5.11%
African Barrick Gold (ABG) 216.30p -4.38%
Supergroup (SGP) 1,079.00p -3.49%
Fenner (FENR) 356.80p -3.15%
Senior (SNR) 276.00p -3.12%
Victrex plc (VCT) 1,643.00p -2.61%
Polymetal International (POLY) 571.00p -2.56%
Soco International (SIA) 414.90p -2.56%
Tullett Prebon (TLPR) 255.30p -2.56%
Computacenter (CCC) 648.00p -2.56%