FTSE 100 close: London markets finish in the green despite PMI dip
London markets rose today despite new PMI data showing a significant slump in UK business activity.
The FTSE 100 closed up 0.72per cent after a day in the green, while the FTSE 250, which is more aligned with the health of the UK economy, climbed 1.1 per cent.
S&P Global’s Purchasing Managers’ Index (PMI) for the UK economy came in at 47.9 – far below the 50 reading which indicates flat growth. The PMI assesses the health of an economy’s services and manufacturing sector.
Analysts had predicted a reading of 50.3 this month.
Martin Beck, chief economic advisor to the EY Item Club, said the data will give the Bank of England “food for thought” ahead of its next rate decision in September and “suggests an increase is no longer a certainty”.
“On balance, the EY Item Club thinks the latest survey findings may not be enough to deter the Bank of England from raising interest rates again, given recent developments in pay and services inflation. But they do reinforce the expectation that a rate rise next month, if it happens, will likely be the last in the current cycle,” he said.
The FTSE 100’s top riser was Endeavour Mining, closing up 4.18 per cent by late afternoon, as miners continued a strong performance this week.
Russ Mould, investment director for AJ Bell told City PM yesterday that investors were pivoting to opportunities in mining as a gloomy economic climate meant they were deciding they “no longer want paper assets, and want hard assets instead.”
JD Sports Fashion had a turbulent day, initially rising 2.24 per cent to rebound from yesterdays’ sharp fall.
The retailer closed down over 5 per cent though – the FTSEs’ biggest faller – after being hit by news from across the pond that US footwear chain Foot Looker had slashed its guidance for the full year.
Oil giants BP and Shell languished near the bottom end of the bluechip index throughout the day, as oil prices reacted to concerns over demand from the world’s biggest crude importer, China.
The FTSE 250’s biggest rise was Great Portland Estate – one of the biggest property leasers in the capital – who closed up 5.58 per cent.
Shares in North Sea firm Ithaca Energy tumbled nearly 5 per cent after early morning warnings of a production slip next year. Harbour Energy was also down 2.62 per cent.