London close: Stocks fall after choppy day on mixed manufacturing data

3rd Jun 2013 17:03

A mixed bag of manufacturing results from across the globe resulted in a weak start to the new month for financial markets, with the FTSE 100 sinking to levels not seen in over four weeks.After a volatile session, the FTSE 100 finished 58 points lower at 6,525. The last time the index finished lower was on May 3rd when it closed at 6,521.Markets started off firmly in negative territory after HSBC revised lower its reading of factory activity in China, showing the sector contracted at a worse-than-expected rate in May. The Chinese manufacturing purchasing managers' index (PMI) was revised lower to 49.2, worse than the initial 49.6 estimate and down from April's reading of 50.4. With any figure below 50 representing contraction, this now stands at its worst level in eight months.Losses were pared by mid-morning after manufacturing PMIs from the UK and Eurozone came in above forecasts, though the latter sector still remains in contraction: the UK PMI rose from an upwardly revised 50.2 to a 14-month high of 51.3 last month; while the Eurozone PMI increased to a 15-month high of 48.3 in May, up from 46.7 the month before.Eyes then turned to the States as every major economic indicator continues to be scrutinised over how it will affect the Federal Reserve's outlook for its quantitative easing (QE) programme. Equities worldwide have been under pressure over recent sessions as markets begin to price in a 'tapering' of QE, something that has been largely responsible for the impressive year-to-date surge across global indices.The ISM survey for US factory activity fell from 50.7 to 49 in May, disappointing the majority of analysts who were expecting no change. Market Strategist Ishaq Siddiqi from ETX Capital said that fall "does play into the hands of liquidity-fixated market participants who believe it is not the right time for the Fed to taper stimulus and QE could stick around during the summer."Nevertheless, traders will likely continue to tread cautiously ahead of the services PMI on Wednesday and the all-important jobs report on Friday.FTSE 100: ARM falls as Intel competition intensifiesChip designer ARM Holdings was the worst top-tier performer of the day on Monday after Samsung confirmed that it would use an Intel processor in its new Galaxy tablets, a sharp blow to ARM whose chips had previously powered some of the South Korean firm's devices.Supermarket group Tesco was also in the red ahead of its first-quarter trading update on Wednesday, as Investec reiterated its 'sell' rating for the stock. The broker said that the statement this week will likely disappoint, with like-for-like sales growth expected to be negative in the UK, Asia and in Europe. Mining stocks held up well today in spite of a downwards revision to Chinese manufacturing activity by HSBC. Vedanta Resources and Glencore Xstrata were among the best performers, making headlines after both were rumoured to be potential bidders for fellow miner Rio Tinto's 59% stake in Iron Ore Company of Canada, which could fetch up to $4.0bn.Gold miner Polymetal International also rose after JPMorgan Cazenove upgraded its rating for the stock from 'neutral' to 'overweight', citing an EPS inflection point next year following the sharp falls in the gold price earlier this year.Tullow Oil was making gains after Ghana last week approved the development plan for the Tweneboa-Enyenra-Ntomme (TEN) development which is expected to deliver first oil in 2016. Galvan said this morning that TEN could market the next phase of growth for Tullow and recommended investors to 'buy'.Food group Tate & Lyle was in demand after Jefferies kept a 'buy' rating, saying that the market is under appreciating the growth potential of its Speciality Food Ingredients division. In contrast, electricity provider Centrica was a heavy faller after Berenberg cut its rating to 'hold'.FTSE 100 - RisersAntofagasta (ANTO) 970.50p +2.64%Vedanta Resources (VED) 1,291.00p +2.30%Johnson Matthey (JMAT) 2,613.00p +2.03%Polymetal International (POLY) 703.50p +1.88%Eurasian Natural Resources Corp. (ENRC) 244.30p +1.83%Evraz (EVR) 137.70p +1.77%Tullow Oil (TLW) 1,062.00p +1.63%Associated British Foods (ABF) 1,837.00p +1.38%Glencore Xstrata (GLEN) 326.55p +1.07%Tate & Lyle (TATE) 824.00p +0.92%FTSE 100 - FallersARM Holdings (ARM) 919.00p -6.98%Aggreko (AGK) 1,706.00p -4.53%Carnival (CCL) 2,163.00p -3.65%easyJet (EZJ) 1,221.00p -3.55%Sage Group (SGE) 355.40p -2.66%BT Group (BT.A) 294.30p -2.58%Centrica (CNA) 371.20p -2.32%Smith & Nephew (SN.) 754.50p -2.20%Pearson (PSON) 1,203.00p -2.12%William Hill (WMH) 433.40p -2.10%FTSE 250 - RisersHeritage Oil (HOIL) 147.50p +3.95%Carpetright (CPR) 631.50p +3.19%Afren (AFR) 134.60p +2.59%Paragon Group Of Companies (PAG) 306.30p +1.79%Rathbone Brothers (RAT) 1,577.00p +1.74%Hansteen Holdings (HSTN) 89.80p +1.58%Ashtead Group (AHT) 640.50p +1.51%Betfair Group (BET) 820.00p +1.49%WH Smith (SMWH) 767.00p +1.39%Euromoney Institutional Investor (ERM) 955.00p +1.38%FTSE 250 - FallersOxford Instruments (OXIG) 1,606.00p -4.58%Lonmin (LMI) 282.40p -4.27%Mitie Group (MTO) 249.00p -4.19%Hochschild Mining (HOC) 243.10p -4.14%Intermediate Capital Group (ICP) 449.10p -4.04%Persimmon (PSN) 1,174.00p -3.77%Dairy Crest Group (DCG) 469.50p -3.45%Halfords Group (HFD) 317.80p -3.40%Perform Group (PER) 555.00p -3.31%CSR (CSR) 534.00p -3.26%