London close: Stocks slump on global manufacturing data

22nd Mar 2012 16:57

- PMIs disappoint from China and Eurozone - Miners down on demand concerns, Randgold plummets on Malian military coup - Broker downgrades weigh on stocks After a steep fall early on, London's blue chips traded broadly sideways for the remainder of the day as gloomy economic data weighed on sentiment.Chinese factory activity registered an even worse contraction in March as manufacturing hit a four-month low. The flash HSBC Manufacturing PMI for this month fell back to 48.1 from the 49.6 registered in February. This is its lowest level since last November. Readings below 50 imply a contraction. Meanwhile, manufacturing data from the Eurozone showed that the single-currency region remains in recessionary territory. The Eurozone's preliminary manufacturing PMI fell to a three-month low in March to 47.7 from the previous 49.0. Brent futures were trading 1.256% down at $122.60 on the ICE Europe in afternoon trade in London as data signalling a contraction in both Eurozone and Chinese manufacturing could lead to a fall in consumption. Meanwhile, Eric Besson, the French Industry Minister, said on Wednesday that the country is considering a release of supply from emergency reserves to put a lid on surging prices. RANDGOLD LEADS MINERS LOWER Shares in Randgold Resources tumbled after a military coup in Mali sparked concerns that operations at its Loulo and Morila gold mines in the country may be disrupted. According to media reports, rebel troops have taken over state radio and television in Mali to announce that they have seized control of the country. Chief Executive Mark Bristow, currently at Loulo, has assured that operations were still running normally, but it did not tempt investors to dip back in with shares finishing down nearly 13%. Other miners were being weighed down by the gloomy Chinese manufacturing data, with markets worrying over what this means for the demand for metals from the world's second-largest economy. Fresnillo, Vedanta, Glencore, Rio Tinto, Antofagasta and Xstrata were among the worst performers on the blue chip index. STOCKS DIGEST BUDGET PROPOSALS Meanwhile, stocks were reacting to yesterday's Budget announced by Chancellor of the Exchequer George Osborne. Pharmaceuticals titan GlaxoSmithKline has confirmed that it will invest £500m in the UK to build a new factory and create 1,000 new jobs after Osborne said he wanted to encourage investment in R&D and manufacturing by reducing the rate of corporation tax. Nomura said that this cut in corporation tax should also be a "small positive for UK utilities paying majority UK corporation tax" - National Grid, Pennon, Severn Trent and United Utilities were all making gains. United Utilities was also being lifted by an upbeat statement this morning in which it said it is on course to meet its regulatory outperformance targets. Self-storage groups Big Yellow and Safestore dropped after saying that, as a result of Budget proposals, it may have to start charging VAT to its customers later on this year. Meanwhile, airlines IAG and easyJet were flying higher after Osborne said yesterday that "this country must confront the lack of airport capacity in the south-east of England - we cannot cut ourselves off from the fastest growing cities in the world." KINGFISHER RISES, ASTRA FALLS... The final year of do-it-yourself (DIY) retailer Kingfisher's 'Delivering Value' initiative did what it says on the tin, with the full year dividend up by a quarter. Meanwhile, sales rose 3.6% and adjusted pre-tax profits jumped 20.4%, helped shares a little higher today. Shares in pharmaceuticals firm AstraZeneca were lower after the company announced that the formulation patent protecting its SEROQUEL XR drug was found to be invalid by the High Court in the UK. "AstraZeneca is disappointed with the court's decision. However, the company remains committed to defending its intellectual property protecting SEROQUEL XR," the firm said. There has been a raft of broker downgrades today, with a number of heavyweights being taken down a peg or two. AMEC was down after JP Morgan cut its rating from overweight to neutral. Capital Shopping Centres fell after Societe Generale reduced its recommendation from hold to sell. Meanwhile, Espirito Santo appears to have downgraded nearly the entire REIT sector from buy to neutral, cutting its ratings for British Land, Derwent London, Great Portland Estates, Hammerson and Shaftesbury. Gem Diamonds was a heavy faller after Citigroup downgraded its rating on the stock from buy to sell. BCFTSE 100 - RisersInternational Consolidated Airlines Group SA (IAG) 179.30p +3.46%Kingfisher (KGF) 307.40p +2.47%Rexam (REX) 430.00p +1.61%Aberdeen Asset Management (ADN) 251.00p +1.58%Vodafone Group (VOD) 173.75p +1.43%United Utilities Group (UU.) 618.00p +1.31%BT Group (BT.A) 220.20p +1.19%Intertek Group (ITRK) 2,526.00p +1.04%British Sky Broadcasting Group (BSY) 693.50p +0.87%WPP (WPP) 861.50p +0.82%FTSE 100 - FallersRandgold Resources Ltd. (RRS) 5,765.00p -12.59%Fresnillo (FRES) 1,621.00p -6.68%Vedanta Resources (VED) 1,287.00p -4.81%Antofagasta (ANTO) 1,141.00p -4.28%Xstrata (XTA) 1,107.00p -3.06%Weir Group (WEIR) 1,803.00p -3.01%Rio Tinto (RIO) 3,334.00p -2.97%Amec (AMEC) 1,109.00p -2.97%Glencore International (GLEN) 403.50p -2.95%Polymetal International (POLY) 941.00p -2.79%FTSE 250 - RisersRegus (RGU) 114.50p +6.91%William Hill (WMH) 249.90p +2.80%easyJet (EZJ) 454.30p +2.37%Ladbrokes (LAD) 156.10p +2.36%Debenhams (DEB) 79.95p +2.11%SDL (SDL) 740.00p +2.07%Talvivaara Mining Company (TALV) 250.30p +1.79%JD Sports Fashion (JD.) 769.50p +1.38%Carpetright (CPR) 674.00p +1.28%Cable & Wireless Worldwide (CW.) 37.98p +1.17%FTSE 250 - FallersInternational Personal Finance (IPF) 247.60p -8.06%Aquarius Platinum Ltd. (AQP) 149.00p -6.70%Kenmare Resources (KMR) 44.60p -6.11%Ferrexpo (FXPO) 302.60p -5.85%Exillon Energy (EXI) 182.40p -5.83%Essar Energy (ESSR) 141.00p -5.56%Greggs (GRG) 520.00p -5.37%Centamin (DI) (CEY) 74.55p -4.91%Bumi (BUMI) 696.50p -4.59%Hays (HAS) 86.40p -4.00%