London open: Stocks edge lower ahead of services, manufacturing data
London stocks edged lower in early trade on Thursday as investors eyed the latest readings on the UK manufacturing and services sectors.
At 0845 BST, the FTSE 100 was down 0.4% at 5,748.86, with Markit’s manufacturing and services PMIs for April due at 0930 BST.
Spreadex analyst Connor Campbell said: "Analysts are estimating manufacturing to fall from 47.8 to 42.0, with services down from 34.5 to 28.5. If it is going the same way as its eurozone peers, investors should maybe brace themselves for something much lower.
"Nevertheless, there was little sense of panic after the bell. Instead movement was kept to a minimum following days of oil drama."
Market participants were also eyeing the release of the latest US initial jobless claims later in the day.
On home shores, data from the Office for National Statistics showed that public sector borrowing, excluding state-owned banks, rose £9.3bn to £48.7bn in the year to the end of March. Borrowing jumped £3.9bn in March to £3.1bn from a £0.9bn surplus in the same month last year, marking the highest March level since 2016.
Thomas Pugh, UK economist at Capital Economics said: "This is the first sign of the deterioration in the public finances that is inevitable over the next few months.
"The government has already announced additional fiscal spending of around £100bn and if we are right in predicting a 12% contraction in GDP this year as a whole, then borrowing could take an additional £144bn hit from the collapse in the economy. This would push the deficit up from 2% to 15% of GDP and the debt to GDP ratio could climb from 80% to 105%, its highest since the 1960s. What’s more, given our forecast that the economy will be about 5% smaller at the end of 2022 than would have been the case if the coronavirus did not exist, there will be long-lasting effects on the public finances."
In equity markets, 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.
On the upside, Meggitt was the standout gainer 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.
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 also gained, with Barratt Developments, Persimmon and Berkeley Group all higher.
Computacenter rallied as it said current trading has been more robust than anticipated and backed its full-year expectations, but announced that it was scrapping its dividend to preserve cash amid the coronavirus pandemic.
Market Movers
FTSE 100 (UKX) 5,748.86 -0.38%
FTSE 250 (MCX) 15,690.97 0.67%
techMARK (TASX) 3,502.91 0.49%
FTSE 100 - Risers
Meggitt (MGGT) 264.90p 6.86%
Taylor Wimpey (TW.) 142.10p 5.18%
Barratt Developments (BDEV) 492.10p 3.71%
Persimmon (PSN) 2,081.00p 3.02%
Whitbread (WTB) 2,886.00p 2.63%
Royal Dutch Shell 'B' (RDSB) 1,383.80p 2.53%
Melrose Industries (MRO) 90.14p 2.46%
Rightmove (RMV) 461.70p 1.88%
JD Sports Fashion (JD.) 485.00p 1.85%
Royal Dutch Shell 'A' (RDSA) 1,410.00p 1.79%
FTSE 100 - Fallers
Legal & General Group (LGEN) 186.65p -7.09%
Unilever (ULVR) 4,018.00p -5.30%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,642.00p -3.27%
Antofagasta (ANTO) 757.20p -2.55%
Hargreaves Lansdown (HL.) 1,455.00p -2.12%
Pearson (PSON) 441.20p -1.96%
CRH (CRH) 2,252.00p -1.75%
Tesco (TSCO) 236.20p -1.62%
Fresnillo (FRES) 747.60p -1.58%
Associated British Foods (ABF) 1,890.50p -1.54%
FTSE 250 - Risers
Premier Oil (PMO) 25.98p 9.48%
Gamesys Group (GYS) 856.00p 6.87%
Senior (SNR) 61.70p 6.56%
Vistry Group (VTY) 770.00p 5.99%
Wood Group (John) (WG.) 178.80p 5.86%
Aston Martin Lagonda Global Holdings (AML) 50.60p 5.42%
Provident Financial (PFG) 158.00p 5.19%
Computacenter (CCC) 1,562.00p 5.19%
OneSavings Bank (OSB) 217.20p 4.93%
Redrow (RDW) 422.20p 4.71%
FTSE 250 - Fallers
Hyve Group (HYVE) 22.00p -5.78%
Drax Group (DRX) 218.00p -4.72%
Cineworld Group (CINE) 56.16p -4.59%
Beazley (BEZ) 356.40p -3.88%
TI Fluid Systems (TIFS) 135.20p -3.43%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,642.00p -3.27%
Hiscox Limited (DI) (HSX) 763.60p -3.02%
Sequoia Economic Infrastructure Income Fund Limited (SEQI) 102.20p -2.29%
Fisher (James) & Sons (FSJ) 1,372.00p -2.28%
Hochschild Mining (HOC) 124.50p -2.28%