London midday: Stocks touch lower after dismal PMIs; housebuilders gain
London stocks were a touch lower by midday on Thursday, holding up pretty well in the face of dire European and UK PMIs, with housebuilders on the rise.
The FTSE 100 was down 0.2% at 5,759.24, having briefly ticked a little higher, even as figures showed a record slump in UK economic activity in April as coronavirus lockdowns at home and abroad took their toll.
The IHS Markit/CIPS flash composite index - which measures activity in both the services and manufacturing sectors - slid to a record low of 12.9 from 36.0 in March, coming in well below consensus estimates of 31.4.
The services business activity index fell 12.3 in April from 34.5 the month before and against consensus expectations of 29.0, while the manufacturing index declined to 32.9 from 47.8, versus consensus of 42.0.
Chris Williamson, chief business economist at IHS Markit, said: "The UK economy has been hit by the Covid-19 outbreak in April to a degree far surpassing anything seen in the PMI survey’s 22-year history.
"Business closures and social distancing measures have caused business activity to collapse at a rate vastly exceeding that seen even during the global financial crisis, confirming fears that GDP will slump to a degree previously thought unimaginable in the second quarter due to measures taken to contain the spread of the virus."
Williamson said simple historical comparisons of the PMI with GDP indicate that the April survey reading is consistent with GDP falling at a quarterly rate of approximately 7%.
Chris Beauchamp, chief market analyst at IG, said: "If you had told an investor on 1 January that, within a few months, global PMIs would dive to a fraction of their previous level, they would have thought you mad. What is equally confusing perhaps is the way markets seem to have taken today’s incredible readings in their stride, or at least in a relatively calm fashion.
"But then it does not take a genius to infer from the film of deserted European capitals that activity has taken a hit to the solar plexus and will not immediately rebound. And with talk of a new ‘Marshall Plan’ for Europe doing the rounds stock markets are doing their best to ‘look past’ all the bad data."
In equity markets, Taylor Wimpey was a high riser after saying it would start a phased return to construction in May as the housebuilder reported rising orders for new homes.
Vistry advanced as it said it will restart work on around 90% of its Partnership sites and a significant number of its housing sites later this month. Other housebuilders gained, with Barratt Developments, Persimmon and Berkeley Group all higher.
Meggitt rallied as it said it was cutting its global workforce by 15% and that it has begun to see a softening in the last few weeks in its civil aerospace business, both in terms of revenue and the forward order book.
On the downside, consumer goods giant Unilever was in the red after it maintained its quarterly dividend but pulled full-year guidance as first-quarter sales came in flat and the coronavirus pandemic hit its food service and ice-cream business.
Legal & General and Drax were weaker as their stock went ex-dividend.
Market Movers
FTSE 100 (UKX) 5,759.24 -0.20%
FTSE 250 (MCX) 15,688.20 0.65%
techMARK (TASX) 3,501.83 0.46%
FTSE 100 - Risers
Taylor Wimpey (TW.) 149.35p 10.55%
Barratt Developments (BDEV) 510.00p 7.48%
Meggitt (MGGT) 264.00p 6.49%
Persimmon (PSN) 2,141.00p 5.99%
Melrose Industries (MRO) 90.66p 3.05%
Polymetal International (POLY) 1,677.00p 3.04%
Rightmove (RMV) 466.40p 2.91%
Berkeley Group Holdings (The) (BKG) 4,197.00p 2.87%
Evraz (EVR) 245.70p 2.85%
BT Group (BT.A) 120.10p 2.69%
FTSE 100 - Fallers
Legal & General Group (LGEN) 187.60p -6.62%
Hargreaves Lansdown (HL.) 1,443.50p -2.89%
Informa (INF) 422.20p -2.85%
St James's Place (STJ) 759.80p -2.76%
Aveva Group (AVV) 3,380.00p -2.65%
Tesco (TSCO) 234.00p -2.54%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,700.00p -2.53%
InterContinental Hotels Group (IHG) 3,399.00p -2.36%
Pearson (PSON) 439.70p -2.29%
Antofagasta (ANTO) 759.40p -2.27%
FTSE 250 - Risers
Cairn Energy (CNE) 108.70p 10.24%
Premier Oil (PMO) 25.91p 9.19%
Redrow (RDW) 438.20p 8.68%
Wood Group (John) (WG.) 183.00p 8.35%
Vistry Group (VTY) 786.50p 8.26%
Bellway (BWY) 2,597.00p 7.36%
Dixons Carphone (DC.) 68.55p 7.11%
Crest Nicholson Holdings (CRST) 251.00p 6.81%
Elementis (ELM) 68.40p 6.79%
Plus500 Ltd (DI) (PLUS) 1,209.00p 6.10%
FTSE 250 - Fallers
Drax Group (DRX) 212.00p -7.34%
PPHE Hotel Group Ltd (PPH) 1,110.00p -5.93%
FirstGroup (FGP) 54.05p -5.84%
Hyve Group (HYVE) 22.00p -5.78%
Hiscox Limited (DI) (HSX) 748.20p -4.98%
Go-Ahead Group (GOG) 1,164.00p -4.75%
Micro Focus International (MCRO) 379.60p -4.55%
William Hill (WMH) 89.40p -4.14%
Mitchells & Butlers (MAB) 160.00p -3.96%
Beazley (BEZ) 356.20p -3.94%