FTSE gains as manufacturing bounces back
The FTSE rose this morning as better-than-expected UK and Chinese manufacturing data gave investor sentiment a boost and fuelled gains in mining and banking.
Britain’s manufacturing sector unexpectedly returned to growth in January as orders rose for the first time in six months, indicating the UK could avoid recession if the sector continues to recover in coming months.
The Markit/CIPS Manufacturing Purchasing Managers’ Index (PMI) rose to 52.1 — the highest level since May — from an upwardly revised 49.7 in December, data compiler Markit said.
Banks were among the best performers across Europe, with the STOXX Europe 600 Banks index up one per cent.
That was reflected in gains for the UK’s major banks.
Mining stocks were also strong after the Chinese figures, with the STOXX Europe 600 Basic Resources index up 0.7 per cent.
But still casting a shadow were Eurozone debt woes with Greece still to agree terms with its creditors that will save it from a default which would send economic tremors across the globe.
In London Interdealer broker Icap was the highest climber, up 8.6 per cent following a trading update which was well received by investors despite revealing that profits had been hit by the Eurozone crisis.
Also in the financial sector hedge fund giant Man Group was a top riser, with its stock up 2.9 per cent. RBS was up 2.5 per cent, Lloyds 0.6 per cent and Barclays 2.7 per cent.
Meanwhile BP rose three per cent despite a ruling in the US that contractor Halliburton was not responsible liable for some pollution claims in connection with the Gulf of Mexico spill.
There were few significant fallers on the index with iPhone chip maker Arm Holdings down 1.3 per cent, shaving off a little of the gains made following a positive trading update earlier in the week.
Temporary power supplier Aggreko was off by 0.3 per cent while BSkyB nudged down by 0.2 per cent.
In Asia the Nikkei and Hang Seng were broadly flat on closing while China’s official purchasing managers’ index (PMI) for January beat expectations, coming in at 50.5.
On the domestic data front, figures from lender Nationwide showed that British house prices unexpectedly fell for the second month in a row in January.
Across the Atlantic later January’s ADP US national employment report will be the focus of investors’ attention.