- Aberdeen, Babcock, BHP Billiton and GKN provide a lift
- Weir falls on potential Metso merger
- UK PMI falls to eight-month low
techMARK 2,773.69 +0.33%
FTSE 100 6,632.50 +0.52%
FTSE 250 16,342.90 +0.43%
Decent performances from Aberdeen, Babcock, BHP Billiton and GKN gave UK markets a lift on Tuesday, as investors shrugged off a worse-than-expected report on UK manufacturing.
Markets were tracking gains made on Wall Street on Monday evening after Federal Reserve Chair Janet Yellen pledged continued "extraordinary support" for the US economy. She said there is "considerable slack" in the labour market and that the Fed would continue to support the recovery "for some time to come".
The FTSE 100 was trading 0.4% higher at 6,633 by midday, slightly underperforming indices across Europe.
The UK manufacturing purchasing managers' index (PMI) fell from a revised 56.2 to an eight-month low of 55.3 in March, disappointing analysts who had expected a figure closer to 56.7.
Analyst Armela Mancellari from Barclays Research pointed out that despite the growth slowdown, the PMI was still above the long-term average of 51.4. "However, this outcome supports our view that growth will be somewhat slower this year after the strong rebound experienced since the second quarter of 2013," she said.
In the Eurozone, final estimates to manufacturing PMIs for March were mostly left unrevised, confirming a moderate expansion in activity across the single-currency area. Meanwhile, the Eurozone jobless rate was unchanged at 11.9% in February, while the previous month was revised lower.
Meanwhile in China, the official manufacturing PMI increased from 50.2 to 50.3, as expected, but the HSBC manufacturing PMI unexpectedly fell from 48.1 to 48.
"When it comes to manufacturing in China, bad news is good news; soft manufacturing figures increased speculation that the People's Bank of China will inject cash into the bank system to ensure it achieve its growth target," said David Madden, Market Analyst at IG.
Aberdeen, Babcock, BHP Billiton and GKN gain
Asset manager Aberdeen surged this morning after saying that net outflows were just £0.2bn in March, compared with £3.9bn over the first two months of the year, helped by "encouraging inflows to emerging market debt, high yield bonds and property".
Miner BHP Billiton responded to market speculation about a potential de-merger of non-core operations, saying that a "simplification of our portfolio is a priority". Shares rose after the company did not dismiss recent reports that it is considering a $20bn spin-off of its less-profitable assets of aluminium, manganese, thermal coal and nickel.
Babcock rose after it was named preferred bidder on a 21-year contract with the London Fire Brigade. Panmure Gordon upgraded the stock to 'buy' on the back of last week's acquisition of helicopter services provider Avincis and yesterday's announcement of a potential nuclear decommissioning project.
GKN was also higher after buying Williams Hybrid Power which makes flywheel-based energy storage systems for the bus, truck and tram markets.
Leading the downside was Weir, the mining, oil and gas engineer, after confirming media speculation that it has made an indicative all-share merger proposal to Finnish rival Metso. No financial details were given but press reports suggest that it could pay £4bn for its rival. Analysts at Canaccord Genuity said that the deal would need a "substantial equity element".
FTSE 100 - Risers
Aberdeen Asset Management (ADN) 416.20p +6.64%
Babcock International Group (BAB) 1,403.00p +4.16%
Sports Direct International (SPD) 882.50p +3.58%
easyJet (EZJ) 1,770.00p +3.21%
ARM Holdings (ARM) 1,025.00p +2.71%
GKN (GKN) 400.60p +2.64%
BHP Billiton (BLT) 1,889.50p +2.47%
Aviva (AV.) 488.40p +2.39%
Kingfisher (KGF) 430.80p +2.23%
Schroders (SDR) 2,656.00p +2.23%
FTSE 100 - Fallers
Pearson (PSON) 1,040.00p -2.16%
Weir Group (WEIR) 2,501.00p -1.38%
Sainsbury (J) (SBRY) 312.10p -1.27%
Diageo (DGE) 1,840.00p -1.13%
Tesco (TSCO) 292.25p -1.07%
Mondi (MNDI) 1,039.00p -0.95%
Intertek Group (ITRK) 3,051.00p -0.68%
Unilever (ULVR) 2,544.00p -0.66%
Hargreaves Lansdown (HL.) 1,449.00p -0.62%
British American Tobacco (BATS) 3,316.50p -0.57%
FTSE 250 - Risers
Heritage Oil (HOIL) 252.20p +6.19%
Go-Ahead Group (GOG) 1,942.00p +4.24%
Entertainment One Limited (ETO) 342.70p +3.85%
Carphone Warehouse Group (CPW) 337.00p +3.72%
Fenner (FENR) 412.80p +3.56%
AL Noor Hospitals Group (ANH) 1,111.00p +3.45%
Kentz Corporation Ltd. (KENZ) 778.00p +3.25%
Tullett Prebon (TLPR) 291.00p +3.23%
Laird (LRD) 309.80p +3.16%
Bank of Georgia Holdings (BGEO) 2,567.00p +2.97%
FTSE 250 - Fallers
Xaar (XAR) 899.00p -4.16%
FirstGroup (FGP) 140.00p -4.04%
Senior (SNR) 299.40p -2.63%
IP Group (IPO) 202.50p -2.55%
CSR (CSR) 707.00p -2.55%
Catlin Group Ltd. (CGL) 526.00p -2.23%
Amlin (AML) 473.80p -2.17%
EnQuest (ENQ) 121.50p -2.02%
Evraz (EVR) 78.10p -2.01%
Rank Group (RNK) 155.10p -1.90%