London close: Stocks finish flat after uninspiring data

London stocks finished broadly flat on Friday following a batch of uninspiring economic data including reports on UK construction, eurozone gross domestic product and US retail sales.

UK construction output fell 0.9% in June from May, more or less in line with consensus expectations for a 1% drop, according to the Office for National Statistics.

Compared to June 2015, construction output was down 2.2%, which was a touch steeper than the 2.1% drop forecast by economists and worse than the 1.6% decline the month before.

Pantheon Macroeconomics said: “June’s official data confirm that the construction sector re-entered recession in the first half of this year, as public sector cuts and Brexit risk took their toll.

“The downturn looks set to deepen in the third quarter; July’s construction PMI broadly is consistent with output falling by about 3.5% quarter-on-quarter. Meanwhile, Brexit negotiations will be protracted, so businesses will hold off committing to major capital expenditure for a long time to come.”

Elsewhere, Eurozone gross domestic product rose by 0.3% in the second quarter, confirming preliminary estimates and in line with economists’ forecasts, according to data released by Eurostat.

Compared with the same quarter last year, seasonally-adjusted GDP was up 1.6%, also as expected.

Dennis de Jong, managing director at UFX.com, said: “While the eurozone may have grown during the second quarter, a sharp drop from the first three months of the year reflects the uncertainty that gripped Europe ahead of June’s Brexit vote.”

Eurozone industrial production rose 0.6% in June from May, versus expectations for a 0.5% increase, separate Eurostat data showed. On the year, industrial production for the euro bloc was up 0.4%, missing expectations of a 0.7% increase.

In the US, retail sales were unchanged from the previous month, down from a 0.6% increase in June and missing expectations for a 0.4% gain, the Commerce Department revealed.

In another report, the Labor Department said its producer price index for final demand declined 0.4% in July compared to a 0.5% increase in June and analysts’ expectations for a 0.1% rise. It marked the first decline since March and the largest since September 2015.

The University of Michigan’s consumer confidence index also missed forecasts. The preliminary reading for August came in at 90.4, up from 90 the previous month but below estimates for 91.5.

Data out earlier on Chinese industrial output and retail sales for July came in below expectations, although Asian markets seemed to ignore the figures with equities closing higher.

The rate of growth in fixed asset investment year-to-date slowed to a 8.0% year-on-year clip versus expectations of 8.9%.

"A further sharp slowdown in investment growth means that unless the government steps up policy support, it is only a matter of time before the economy begins to slow again," Julian Evans-Pritchard, China economist at Capital Economics said.

Industrial production in China slowed to a 6.0% year-on-year pace in July, compared to expectations of 6.2% and down from 6.2% in the month before.

Meanwhile, oil prices gained after Saudi Arabia's energy minister Khalid al-Falih on Thursday said that oil producers would discuss ways to stabilise oil prices during a meeting next month in Algeria.

Brent crude rose 1.04% to $46.53 per barrel and West Texas Intermediate edged up 1.3% to 44.07 per barrel at 1611 BST.

On the corporate front, Coca-Cola HBC continued to fizz higher a day after it posted an 11% jump in first-half operating profit and sounded an upbeat note on the full-year outlook.

The Restaurant Group gained after the pub and restaurant chain announced the departure of its chief executive Danny Breithaupt, who has been with the company for 15 years.

Tullow Oil was given a boost after Bank of America Merrill Lynch upgraded the stock to ‘buy’ from ‘neutral’ and lifted the price target to 285p from 275p.

Going the other way, mining stocks were under the cosh on lacklustre China industrial data. Antofagasta, Rio Tinto and Anglo American were among the biggest fallers.

Genus shares were under pressure after a US judge ruled against the animal genetics company in its case versus US rival Sexing Technologies.

A.G. Barr shares also fell as Berenberg downgraded its rating on the stock to ‘sell’ from ‘hold’ and cut its target price to 470p from 530p, citing a “weak” trading update by the soft drinks maker.

Market Movers

FTSE 100 (UKX) 6,916.02 0.02%
FTSE 250 (MCX) 17,921.38 0.64%
techMARK (TASX) 3,533.94 0.17%

FTSE 100 - Risers

easyJet (EZJ) 1,101.00p 3.97%
Marks & Spencer Group (MKS) 354.00p 3.66%
Paddy Power Betfair (PPB) 9,580.00p 2.84%
Whitbread (WTB) 4,060.00p 2.78%
Tesco (TSCO) 160.50p 2.52%
Intu Properties (INTU) 313.00p 2.39%
Coca-Cola HBC AG (CDI) (CCH) 1,721.00p 2.38%
International Consolidated Airlines Group SA (CDI) (IAG) 407.60p 2.31%
Sainsbury (J) (SBRY) 238.00p 2.28%
Dixons Carphone (DC.) 367.60p 2.22%

FTSE 100 - Fallers

Antofagasta (ANTO) 514.00p -3.38%
Rio Tinto (RIO) 2,409.00p -3.21%
Anglo American (AAL) 856.90p -3.16%
Glencore (GLEN) 196.65p -1.67%
BHP Billiton (BLT) 1,040.00p -1.47%
AstraZeneca (AZN) 5,105.00p -1.09%
Sky (SKY) 875.00p -1.07%
DCC (DCC) 6,970.00p -0.99%
Randgold Resources Ltd. (RRS) 8,560.00p -0.98%
3i Group (III) 634.00p -0.94%

FTSE 250 - Risers

Restaurant Group (RTN) 417.70p 10.85%
Ibstock (IBST) 172.90p 7.73%
Polypipe Group (PLP) 286.60p 7.62%
Brown (N.) Group (BWNG) 190.10p 5.67%
Pagegroup (PAGE) 367.40p 5.24%
Ted Baker (TED) 2,462.00p 4.54%
Savills (SVS) 714.00p 4.54%
Tullow Oil (TLW) 230.70p 4.25%
Sports Direct International (SPD) 308.80p 4.11%
AO World (AO.) 153.80p 3.99%

FTSE 250 - Fallers

Genus (GNS) 1,782.00p -8.05%
Riverstone Energy Limited (RSE) 986.00p -4.46%
PayPoint (PAY) 991.00p -3.79%
Ocado Group (OCDO) 291.10p -3.51%
Hochschild Mining (HOC) 295.10p -2.61%
G4S (GFS) 226.60p -2.45%
Pendragon (PDG) 32.12p -2.43%
Barr (A.G.) (BAG) 514.00p -2.37%
Softcat (SCT) 340.00p -2.19%
Acacia Mining (ACA) 586.00p -1.92%