- Gloomy Chinese, UK and Eurozone data
- Rajoy denies bailout
- FirstGroup sinks after West Coast disappointment.
The FTSE 100 was trading broadly flat by midday on Wednesday as investors remained cautious after a raft of disappointing economic data.
China's non-manufacturing purchasing managers' index (PMI) fell from 56.3 to 53.7 in September, according to the National Bureau of Statistics and China Federation of Logistics and Purchasing. China's consumer sentiment index also fell from 90.4 to 89.3 last month, its lowest level since December, according to Deutsche Boerse's MNI.
Meanwhile, the UK's dominant service sector expanded in September but undershot analysts' forecasts. Markit's service sector PMI registered 52.2 down from 53.7 the month before. Analysts had pencilled in a reading of 53.
In Eurozone news, the Markit Eurozone PMI Composite Output Index (which reflects a weighted-average combination of the manufacturing and services sector in the region) hit a four-month low at 46.1. Although also ahead of the flash estimate of 45.9, it still slipped from August's reading of 46.3.
Spanish Prime Minister Mariano Rajoy yesterday denied claims that his country is looking to request a bailout this weekend. He said that the country had no immediate plans to ask for aid.
"Uncertainty is returning to the markets at the moment as Mariano Rajoy plays his cards very close to his chest in respect to Spain's request for a bailout. While it's a foregone conclusion now that Spain will request a bailout, no one really has a clue when this is," said market analyst Craig Erlam from Alpari.
"There is a general consensus that Rajoy will wait until after the regional elections on 21 October, as we saw a similar move earlier in the year, however this is only an educated guess at best. One thing that appears certain is that until we do see some progress here, we're unlikely to see many big moves in the markets," he said.
FTSE 100: Sainsbury's picks up but Tesco still down
After an earlier fall, retailing giant Sainsbury's was higher by lunchtime after saying it had outperformed the market in the second quarter, with total sales up 4.4% excluding fuel and like-for-like (LFL) sales up 1.9%.
However, sector peer Tesco was still in the red after its interim results. The supermarket colossus saw a return to LFL sales growth in the second quarter, although it has had to sacrifice margin to do so. Pre-tax profits (pre exceptionals and property profits) fell 15%, worse than expected according to Seymour Pierce which labelled them as "disappointing" this morning.
Pearson, the education and publishing firm, dropped after revealing that its Chief Executive Officer Marjorie Scardino has decided to call it quits at the end of the year.
Asset manager Schroders was unwanted this morning after UBS cut its rating on the stock from 'neutral' to 'sell'. "We believe that expectations on flows and on capital returns have led the stock to re-rate vs peers while we remain cautious on both points," the broker said.
Heading the other way was mining group Xstrata after raising its copper mineral resource estimate at the major long-life development El Pachón project in San Juan Province, Argentina, by 20%.
FTSE 250: Transport groups react to cancellation of West Coast rail deal
Shares in transport firm FirstGroup took a hammering this morning after the Department for Transport (DfT) dropped the competition to award it the West Coast franchise. Following a legal challenge from current operator Virgin Rail, the DfT said it had found "significant technical flaws in the way the franchise process was conducted" and was launching a review.
Stagecoach, part owner of the Virgin Rail joint venture with Virgin Group, was in demand after saying it was in discussions with the government regarding the rail franchising review.
Meanwhile, according to Jefferies, the three other live franchise contests out (the Great Western, Essex Thameside and Thameslink contracts) will likely be delayed as a result of a government review, taking down the share prices
of Go-Ahead and National Express.
BTG, the specialist healthcare company, jumped after reporting it had outperformed in the first half and was boosting its revenue expectations for the full year.
Budget airline easyJet was in demand after a surge in business at the end of the summer and a benign operating environment means it was upping its full-year profit forecasts.
FTSE 100 - Risers
ARM Holdings (ARM) 585.50p +1.47%
International Consolidated Airlines Group SA (CDI) (IAG) 161.30p +1.45%
HSBC Holdings (HSBA) 587.70p +1.24%
Evraz (EVR) 249.30p +1.22%
Xstrata (XTA) 978.10p +1.19%
Centrica (CNA) 331.70p +1.19%
Glencore International (GLEN) 342.00p +1.18%
Vedanta Resources (VED) 1,051.00p +0.86%
Hargreaves Lansdown (HL.) 641.00p +0.79%
British Sky Broadcasting Group (BSY) 758.50p +0.73%
FTSE 100 - Fallers
Anglo American (AAL) 1,838.50p -1.95%
Capita (CPI) 762.00p -1.74%
IMI (IMI) 935.00p -1.53%
Weir Group (WEIR) 1,771.00p -1.50%
Schroders (SDR) 1,520.00p -1.49%
Severn Trent (SVT) 1,658.00p -1.37%
Admiral Group (ADM) 1,051.00p -1.22%
Tesco (TSCO) 332.70p -1.19%
Serco Group (SRP) 584.50p -1.18%
Smith & Nephew (SN.) 683.50p -1.09%
FTSE 250 - Risers
BTG (BTG) 360.60p +8.26%
easyJet (EZJ) 622.50p +4.80%
Dunelm Group (DNLM) 686.00p +4.73%
Home Retail Group (HOME) 94.30p +4.66%
St. Modwen Properties (SMP) 203.80p +4.25%
Talvivaara Mining Company (TALV) 157.50p +2.47%
Centamin (DI) (CEY) 96.15p +2.29%
Stagecoach Group (SGC) 289.50p +2.19%
TUI Travel (TT.) 240.70p +2.12%
Paragon Group Of Companies (PAG) 211.50p +1.78%
FTSE 250 - Fallers
FirstGroup (FGP) 196.40p -19.51%
Bumi (BUMI) 152.00p -4.70%
Ruspetro (RPO) 103.00p -4.19%
Bodycote (BOY) 394.00p -2.60%
Lancashire Holdings (LRE) 823.00p -2.20%
Galliford Try (GFRD) 715.00p -2.19%
Spectris (SXS) 1,760.00p -1.95%
Inmarsat (ISAT) 574.00p -1.88%
Bank of Georgia Holdings (BGEO) 1,172.00p -1.84%
Petropavlovsk (POG) 420.10p -1.75%