- Pressure steps up on ECB to act
- Eurozone inflation eased further in May
- HSBC China manufacturing PMI disappoints
- UK construction PMI misses estimates
techMARK 2,817.91 -0.16%
FTSE 100 6,837.71 -0.38%
FTSE 250 16,010.39 -0.46%
London's FTSE 100 was trading lower on Tuesday as investors reacted to the latest Eurozone data with caution ahead of a policy meeting later this week.
The latest inflation figures for the single-currency region showed that consumer-price growth eased further in May, piling the pressure on the European Central Bank (ECB) to adjust its policy tools on Thursday.
However, given the potential for the ECB to disappoint amid calls for extraordinary measures to simulate growth, investors chose to take profits across Europe with the UK's FTSE 100 down 0.4% at 6,838 just before midday.
"The ECB looks set to cut interest rates and announce some lending incentives after its meeting this Thursday," said Jennifer McKeown, Senior European Economist at Capital Economics. "But while today's data support our view that a much bolder quantitative easing programme is warranted, we doubt that the Bank will be operationally or ideologically prepared to announce it this week," she said.
The annual rise in consumer prices in the Eurozone eased to just 0.5% last month, down from 0.7% growth in April and below the 0.6% expected by analysts. Meanwhile, the 'core' rate of inflation, which excludes volatile items, slowed to 0.7% from 1%, matching the record low level set in March.
Concerns over a slowdown in China were also dampening sentiment after the final reading of HSBC's own manufacturing purchasing managers' index (PMI) for May was revised lower from 49.7 to 49.4 in May. This was up from 48.1 in April but below analysts' forecasts and still below the 50-point mark which marks a contraction.
This came in contrast to the government's 'official' manufacturing PMI released at the weekend which showed that growth in the sector had picked up slightly last month.
In other news, the rate of growth in the UK construction sector unexpectedly eased last month. Markit's construction PMI fell from 60.8 to 60 last month, surprising analysts who had expected an increase to 61.
Wolseley gains after Q3 results
Currency movements put a dampener on third-quarter results at heating and plumbing products group Wolseley, but strong growth in the US and Nordic regions drove an acceleration in like-for-like sales to 5.1%, helping shares
to rise strongly this morning. This compared with the 3% like-for-like growth registered in the second quarter.
South West Water owner Pennon declined despite unveiling higher annual profits and dividends, as the company said its Viridor landfill and waste recycling business took a hit from cut-throat pricing by rivals.
Security group G4S was trading lower on the news that is to be examined by a UK government-funded watchdog after a complaint made by a human rights group in Israel.
Newly floated estate agent Foxtons dropped after announcing that Chief Executive Michael Brown is quitting for personal reasons.
Interdealer broker Tullett Prebon saw shares jump on reports that the company is in advanced talks to appoint a replacement for Chief Executive Terry Smith.
FTSE 100 - Risers
Wolseley (WOS) 3,396.00p +2.60%
easyJet (EZJ) 1,576.00p +1.09%
Royal Dutch Shell 'B' (RDSB) 2,464.50p +0.65%
Royal Dutch Shell 'A' (RDSA) 2,367.50p +0.47%
Babcock International Group (BAB) 1,229.00p +0.41%
Coca-Cola HBC AG (CDI) (CCH) 1,421.00p +0.21%
BAE Systems (BA.) 428.80p +0.19%
Whitbread (WTB) 4,204.00p +0.14%
Kingfisher (KGF) 387.00p +0.13%
SSE (SSE) 1,572.00p +0.13%
FTSE 100 - Fallers
Petrofac Ltd. (PFC) 1,236.00p -2.06%
Anglo American (AAL) 1,463.00p -1.91%
Morrison (Wm) Supermarkets (MRW) 195.00p -1.81%
G4S (GFS) 245.30p -1.72%
Royal Mail (RMG) 517.50p -1.62%
William Hill (WMH) 352.00p -1.62%
Melrose Industries (MRO) 275.60p -1.54%
Barratt Developments (BDEV) 356.10p -1.52%
BHP Billiton (BLT) 1,859.50p -1.46%
Sports Direct International (SPD) 774.50p -1.46%
FTSE 250 - Risers
Tullett Prebon (TLPR) 305.20p +5.17%
Cairn Energy (CNE) 207.00p +2.99%
CSR (CSR) 610.00p +2.52%
Betfair Group (BET) 1,005.00p +2.13%
Hellermanntyton Group (HTY) 315.60p +1.97%
Entertainment One Limited (ETO) 313.30p +1.82%
Beazley (BEZ) 251.80p +1.70%
Tate & Lyle (TATE) 696.50p +1.38%
Grafton Group Units (GFTU) 577.00p +1.23%
Fidessa Group (FDSA) 2,329.00p +1.22%
FTSE 250 - Fallers
Foxtons Group (FOXT) 315.70p -4.28%
Imagination Technologies Group (IMG) 224.10p -4.07%
Evraz (EVR) 98.90p -3.42%
Ocado Group (OCDO) 363.30p -3.33%
Pennon Group (PNN) 761.00p -2.87%
Thomas Cook Group (TCG) 160.30p -2.73%
Fenner (FENR) 340.30p -2.58%
Playtech (PTEC) 647.00p -2.56%
Rightmove (RMV) 2,240.00p -2.27%
Polymetal International (POLY) 518.50p -2.26%