London close: Stocks slip after China data disappoints
London stocks closed lower on Wednesday, weighed down by weakness in the mining sector and disappointing earnings from ITV and Taylor Wimpey, as the City was covered in a blanket of snow.
The FTSE 100 was down 0.69% to 7,231.91, while the pound was off 0.86% against the dollar at 1.3785 and 0.70% weaker versus the euro at 1.1289.
Investors were mulling the latest data releases from China, as both the manufacturing and non-manufacturing PMIs for February came in lower than expected at 50.3 and 54.5, respectively. This dragged on miners, with shares in Glencore, Rio Tinto, Anglo American, BHP Billiton and Antofagasta all lower.
Chris Beauchamp at IG, said: "There was more good news for markets this afternoon thanks to a good US GDP reading. Particularly encouraging was the consumer spending element, which hit its highest level in three years. Evidently the lack of wage growth is less of a problem than previously thought. It has been a somewhat mixed session, as while markets are off the lows of the day investors are still digesting Powell's comments from yesterday.
"All eyes are on the US dollar index, which is poised to break to a six-week high, which might finally lead to some sustained downside for the euro and sterling and let UK and European markets play catch-up. Then again, the powerful downtrend might just reassert itself, as the market adjusts following Powell’s testimony. They learned to live with three hikes, so four might be survivable too."
The latest GfK survey was also in focus, showing consumer confidence in the UK fell in February, with the long-running index down one point to -10 from January, as expected.
"Ongoing concerns about sluggish household income, rising prices paid by consumers in the shops, and the prospect of inflation-busting council tax and interest rate hikes has dented confidence after last month’s surprising rally," said GfK's Joe Staton. "The two-year trend of negative sentiment - the overall index score has bounced between zero and -13 since February 2016 - proves consumers feel pessimistic about the state of household finances and the wider UK economy."
The retail sector was in in the spotlight as Toys R Us and Maplin went into administration, putting around 5,500 jobs at risk.
Neil Wilson, senior market analyst at ETX Capital, attributed the failure of Toys R Us to a "systemic failure to move with the changes in the retail sector". He also said the "Amazon effect" was all too clear to see, adding that there are implications for competitors and the retail market in general.
Outside of the main index, Mothercare shares tumbled, while Debenhams and Marks & Spencer also traded lower.
Sainsbury’s, which probably stands to gain most from the Toys R Us demise through Argos, was trading up, while Tesco, another likely gainer, also rose. Meanwhile, Dixons Carphone was higher on the back of Maplin’s collapse.
Elsewhere, ITV shares slumped as the broadcaster said profits fell last year amid a squeeze on advertising sales, although the dividend was lifted 10% as a 'strategic refresh' got underway under new chief executive Carolyn McCall.
Taylor Wimpey was in the red as it posted a drop in full-year pre-tax profit, while engineer Weir slipped even as it reported a 47% rise in full-year pre-tax profits.
Builders merchant Travis Perkins suffered heavy losses as it said adjusted full-year pre-tax profit dropped 10%, while while FTSE 250 hedge fund Man Group lost ground even as it reported a rise in full-year funds under management amid record net inflows
Premier Inn and Costa owner Whitbread slipped as it announced the acquisition of a portfolio of 19 hotels in Germany from Foremost Hospitality Group for an undisclosed sum.
Insurer Admiral rallied after posting a 43% jump in full-year pre-tax profit and declaring a special dividend amid record customer numbers.
Business information group Informa rose as it said revenue in the 12 months to the end of December grew 30.7% to £1.76bn and UBM gained as its full-year numbers came in in-line with expectations.
Wealth manager St James’s Place advanced as it posted a 36% increase in full-year operating profits.
In broker note action, James Fisher was lifted by an upgrade to ‘buy’ at Canaccord and British American Tobacco was weaker after a downgrade to ‘neutral’ at Citi.
Market Movers
FTSE 100 (UKX) 7,231.91 -0.69%
FTSE 250 (MCX) 19,687.27 -0.95%
techMARK (TASX) 3,317.75 -0.38%
FTSE 100 - Risers
St James's Place (STJ) 1,154.50p 2.58%
International Consolidated Airlines Group SA (CDI) (IAG) 614.60p 1.86%
Shire Plc (SHP) 3,109.00p 1.80%
Tesco (TSCO) 210.80p 1.79%
GKN (GKN) 437.80p 1.65%
Croda International (CRDA) 4,622.00p 1.58%
WPP (WPP) 1,394.00p 1.46%
Informa (INF) 695.40p 1.37%
Sky (SKY) 1,348.00p 1.24%
BAE Systems (BA.) 579.40p 1.19%
FTSE 100 - Fallers
ITV (ITV) 160.00p -7.62%
Admiral Group (ADM) 1,843.00p -4.56%
Fresnillo (FRES) 1,219.50p -4.20%
Taylor Wimpey (TW.) 186.00p -4.00%
Antofagasta (ANTO) 870.00p -3.95%
Standard Chartered (STAN) 810.80p -3.36%
Anglo American (AAL) 1,780.60p -3.33%
Rio Tinto (RIO) 3,926.00p -3.00%
Severn Trent (SVT) 1,707.50p -2.84%
BHP Billiton (BLT) 1,484.20p -2.68%
FTSE 250 - Risers
Fisher (James) & Sons (FSJ) 1,562.00p 10.78%
AA (AA.) 79.50p 8.19%
Ultra Electronics Holdings (ULE) 1,590.00p 4.61%
Drax Group (DRX) 248.60p 4.19%
Elementis (ELM) 291.80p 3.92%
Hastings Group Holdings (HSTG) 312.60p 2.83%
Sanne Group (SNN) 646.00p 2.38%
Ocado Group (OCDO) 553.20p 1.88%
UBM (UBM) 922.00p 1.88%
Weir Group (WEIR) 2,036.00p 1.75%
FTSE 250 - Fallers
Travis Perkins (TPK) 1,285.00p -10.45%
Greggs (GRG) 1,195.00p -7.51%
Genus (GNS) 2,204.00p -6.59%
NewRiver REIT (NRR) 293.00p -5.89%
Brown (N.) Group (BWNG) 190.98p -5.60%
FirstGroup (FGP) 81.95p -5.26%
Man Group (EMG) 172.10p -5.14%
Vectura Group (VEC) 72.45p -4.80%
Hunting (HTG) 614.50p -4.62%
Go-Ahead Group (GOG) 1,531.00p -4.19%