FTSE 100 watch: Index edges lower on weak manufacturing figures

on Sep 1, 2014
Updated: Oct 17, 2019

iNVEZZ.com, Monday, September 1: The FTSE 100 has edged lower today, weighed down by figures showing a manufacturing slowdown in China, the eurozone and the UK, as well as ongoing geopolitical tensions in Ukraine and limited risk appetite ahead of a busy week for financial markets worldwide.

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The UK benchmark index has also been pressured by weakness in HSBC (LON:HSNBA) and Tesco (LON:TSCO) after key shareholders trimmed their investments in the groups.
**Manufacturing growth slows**
By 13:57 BST, the Footsie had declined 4.34 points to stand 0.06 percent lower at 6,815.35. Trading volumes were only around a quarter of the 90-day average by mid-session and were expected to remain thin, with US stock markets closed for a public holiday.

The FTSE 100 has reflected investors’ reaction to some disappointing economic figures released today. China’s official purchasing managers’ index (PMI) for the manufacturing sector fell to 51.1 last month, while HSBC’s own China manufacturing PMI was revised lower from 50.3 to 50.2. Both PMIs were down from 51.7 in July.
In the UK, the manufacturing PMI unexpectedly declined from 54.8 to 52.5 in August, while the second estimate of the eurozone manufacturing PMI was revised down from 50.8 to a 13-month low of 50.7 from 51.8 in July.

On the macroeconomic front, tensions in Eastern Europe were ignited over the weekend by calls from Russian President Vladimir Putin for talks on ‘statehood’ for south-east Ukraine. The comments came as Western leaders prepare to impose further sanctions on Moscow following further fighting near the border of Ukraine.
Investors’ risk appetite has also been suppressed ahead of Thursday’s policy decisions from the Bank of England (BoE) and European Central Bank (ECB), followed by the US non-farm payrolls report on Friday.

**Biggest movers**
Tesco has been among the heaviest FTSE 100 fallers today, after major shareholder Harris Associates cut its investment by two-thirds, citing an absence of a clear strategy at the UK’s largest retailer (https://invezz.com/news/equities/13000-tesco-share-price-major-investor-trims-stake Tesco share price: Major investor trims stake). The company’s shares had fallen 1.67 percent to 226.11p by 14:40 BST.

Meanwhile, HSBC was trading 1.14 percent lower at 644.58p. The stock has been hurt after one of Britain’s most high-profile fund managers, Neil Woodford, said he had sold his fund’s stake in the banking group. He cited concerns over the potential impact on the company of several industry-wide probes.
Barclays (LON:BARC) has also been in the red after saying that it would make a £500 million loss from selling part of its Spanish business to Caixabank as part of its non-core asset disposal programme (https://invezz.com/news/equities/12997-barclays-share-price-bank-agrees-sale-of-Spanish-assets Barclays share price: Bank agrees sale of Spanish assets). As of 14:54 BST, the lender’s shares were standing at 223.45p – 0.45 percent down on the day.
Among brighter spots, BAE Systems (LON:BAE) advanced 2.8 percent, topping the blue-chip leader board, with traders citing the impact of a BofA Merrill Lynch upgrade on the defence firm to ‘buy’ from ‘underperform’. As of 14:24 BST, the stock was changing hands at 457.70p – 2.87 percent up on the day.
Meanwhile, M&A speculation was driving the share price of broadcaster ITV (LON:ITV) higher on reports that Liberty Global could make a full bid. (https://invezz.com/news/equities/13003-ITV-share-price-Liberty-Global-seeks-support-for-potential-takeover ITV share price: Liberty Global seeks support for potential takeover?) The stock had gained 2.98 percent to 217.60p as of 15:00 BST.


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