London close: Stocks firmer on flurry of manufacturing data

London stocks managed a positive finish on Wednesday, even after investors had pored over a fresh set of uninspiring manufacturing data.

The FTSE 100 ended the session up 0.42% at 7,149.84, and the FTSE 250 was 0.62% firmer at 24,250.83.

Sterling was in a mixed state, last trading 0.27% stronger on the dollar at $1.3792, while weakening 0.12% against the euro at €1.1635.

“Stock markets in Europe and the US are largely higher thanks to the well-received manufacturing reports from the eurozone and the US,” said Equiti Capital market analyst David Madden.

“Also fuelling the upward move is the disappointing US ADP employment report - the update showed that 374,000 jobs were added last month, which was a major shock seeing as economists were expecting 640,000.

“Considering that Jerome Powell, the head of the Fed, didn’t outline a timeframe for starting the tapering process last week, traders took that as a sign the central banker is not in a rush to rein in the bond buying scheme anytime soon.”

Earlier in the day, data showed UK manufacturing growth slowing to a five-month low in August amid supply chain issues, with the IHS Markit/CIPS manufacturing purchasing managers’ index (PMI) declining to 60.3 from 60.4 in July.

It was still, however, above the 50.0 mark that separates contraction from expansion and above the long-run average of 51.9.

The survey found that manufacturers continued to face rising constraints caused by supply chain issues.

Shortages of inputs and delivery delays disrupted production schedules, leading to slower output growth, and also marked increases in input prices.

Companies nonetheless still achieved solid gains in output, new orders and employment.

“August’s results were almost a carbon copy of the previous month where recovery for manufacturers continued, but there were signs of stagnation and the rise in overall activity slipped back to the weakest for half a year,” said Duncan Brock, group director at the Chartered Institute of Procurement and Supply.

“Businesses were thwarted by brittle supply chains struggling with shortages, port and transportation difficulties as delivery times stretched not to days or weeks, but months for some goods.”

House prices, meanwhile, surged in August, with the average property value across the UK increasing by almost £5,000 in just one month.

The average house prices in the UK rose to £248,857 last month, according to the Nationwide Building Society, up 11% year-on-year.

Property values were up £4,628 month-on-month, or 2.1% in percentage terms, making August's gain the second-biggest jump in the last 15 years and just shy of the 2.3% rise recorded back in April.

Across the pond, private sector employment grew much less than expected in the United States in August as the spread of the Delta variant took its toll, according to the latest data from the ADP.

Employment rose by 374,000 from July, versus expectations for a 613,000 increase, while the July total of jobs added was revised from 330,000 to 326,000.

“Our data, which represents all workers on a company’s payroll, has highlighted a downshift in the labour market recovery,” said Nela Richardson, chief economist at ADP.

“We have seen a decline in new hires, following significant job growth from the first half of the year.

"Despite the slowdown, job gains are approaching four million this year, yet still seven million jobs short of pre-Covid-19 levels.”

Back on home shores, 888 Holdings gained 3.53% as the online betting group reported record interim profits and lifted annual guidance, driven by a spike in volumes during Covid lockdowns and the European football tournament.

Russian gold miner Petropavlovsk was ahead 8%, after saying it swung to a first-half profit.

Building products manufacturer Tyman leapt 7.71% after Berenberg upgraded its stance on the shares to ‘buy’ from ‘hold’ and hiked the price target to 500p from 375p, citing an attractive entry point.

Just Eat Takeaway jumped 7.56% ahead of its removal from the top-flight index on Thursday in the quarterly reshuffle, after the index’s watchdog ruled it was a Dutch rather than a British company.

On the downside, miners retreated as metals prices fell, with Antofagasta down 1.51%, Rio Tinto off 0.93%, BHP losing 1.17%, and Anglo American 0.05% lower.

WH Smith slumped 3.8% after it lifted full-year guidance but warned that 2022 profits were expected to be at the lower end of expectations as the travel sector’s path of recovery from the Covid pandemic remained uncertain.

The newsagent, which operates across airports, train stations and the high street, said group sales in the eight weeks to 28 August were 78% of 2019 levels before the pandemic struck.

Total second half sales were at 65% of those from two years ago.

Market Movers

FTSE 100 (UKX) 7,149.84 0.42%
FTSE 250 (MCX) 24,250.83 0.62%
techMARK (TASX) 4,852.95 0.40%

FTSE 100 - Risers

Just Eat Takeaway.Com N.V. (CDI) (JET) 7,035.00p 7.56%
Informa (INF) 557.60p 4.78%
Ocado Group (OCDO) 2,086.00p 3.63%
JD Sports Fashion (JD.) 1,041.00p 3.02%
Rightmove (RMV) 720.60p 2.74%
Intermediate Capital Group (ICP) 2,245.00p 2.68%
Melrose Industries (MRO) 171.88p 2.47%
Land Securities Group (LAND) 726.00p 2.40%
Entain (ENT) 1,975.50p 2.33%
British Land Company (BLND) 543.80p 2.23%

FTSE 100 - Fallers

Prudential (PRU) 1,481.00p -2.24%
Royal Mail (RMG) 484.60p -1.96%
Antofagasta (ANTO) 1,434.00p -1.51%
BHP Group (BHP) 2,231.00p -1.17%
Fresnillo (FRES) 844.00p -1.17%
Weir Group (WEIR) 1,731.50p -1.14%
Johnson Matthey (JMAT) 2,911.00p -0.95%
Rio Tinto (RIO) 5,338.00p -0.93%
BP (BP.) 294.25p -0.91%
British American Tobacco (BATS) 2,709.00p -0.86%

FTSE 250 - Risers

IP Group (IPO) 138.20p 8.82%
Petropavlovsk (POG) 22.68p 8.00%
Tyman (TYMN) 447.00p 7.71%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,035.00p 7.56%
Trustpilot Group (TRST) 460.00p 6.48%
Trainline (TRN) 382.20p 4.48%
ICG Enterprise Trust (ICGT) 1,196.00p 4.00%
Ninety One (N91) 266.40p 3.67%
Liontrust Asset Management (LIO) 2,435.00p 3.62%
888 Holdings (888) 422.40p 3.53%

FTSE 250 - Fallers

WH Smith (SMWH) 1,568.00p -3.80%
Ashmore Group (ASHM) 386.00p -3.31%
Chrysalis Investments Limited NPV (CHRY) 268.00p -2.90%
Investec (INVP) 298.40p -2.45%
Civitas Social Housing (CSH) 103.80p -2.27%
Avon Protection (AVON) 1,839.00p -2.13%
Greencore Group (CDI) (GNC) 139.00p -2.11%
Diversified Energy Company (DEC) 109.60p -1.79%
TI Fluid Systems (TIFS) 300.50p -1.64%
Ibstock (IBST) 235.60p -1.51%