London midday: Markets fall, shrug off upbeat manufacturing data

2nd Dec 2013 11:24

- Markets lower ahead of data-heavy week- Non-farm payrolls, taper in focus- Investors shrug off positive manufacturing figures this morning- Broker downgrades hit Tesco, Aberdeen, DebenhamstechMARK 2,659.11 -0.55%FTSE 100 6,610.41 -0.60%FTSE 250 15,380.56 -0.56%Markets in the UK and across Europe were firmly in the red on Monday morning with investors showing caution ahead of a busy week with a host of economic data and central bank meetings in focus.Broker downgrades on a number of heavyweight stocks including Tesco, Aberdeen and Debenhams were also providing a drag this morning in London, as well as declines in the utility sectors.All eyes are on the macro agenda this week with several important indicators out from across the globe. However, the focus will likely be on the States, where reports from the manufacturing, construction and housing sectors are due, as well as readings of consumer confidence and employment.Alastair Winter, Chief Economist at Daniel Stewart & Co, said that the November non-farm payrolls figures on Friday will be the "big number of the week". Anything close to October's surprise 204,000 jump is likely to "get pulses racing and equity prices falling" given the recent speculation surrounding an impending taper of stimulus by the Federal Reserve.Policy meetings at the Bank of England and European Central Bank on Thursday will also be closely watched and could prompt some volatile reactions across markets in the UK and Europe.Also in focus this morning was the news that Black Friday, considered the start to the US holiday shopping season, saw its first drop in sales since 2009. According to a National Retail Federation survey over the Thanksgiving holiday weekend, total spend was down 2.9% at $57.4bn. The figures are likely to weigh on US markets when they open later on with stock futures pointing to a flat start on Wall Street.Investors were largely shrugging off upbeat economic data with November manufacturing figures from the UK, Eurozone and China managing to beat expectations. Manufacturing activity in the UK in particular came in at its highest reading since February 2011 last month."[The lower start in Europe] is probably largely due to investors being a little more risk averse at the start of a very big week for the markets, rather than a negative response to the data we've seen this morning, which has actually been largely positive," said Market Analyst Craig Erlam from Alpari.Tesco hit by HSBC downgradeSupermarket giant Tesco was a heavy faller today after analysts at HSBC cut their recommendation for the stock from 'neutral' to 'underweight'. They said that Tesco's current margin targets are unlikely to be maintained and that forecasts will have to be reset, as they slashed their target price for the shares from 400p to 340p.Sector peers Sainsbury and Morrison were also lower by midday.Credit Suisse has cut its recommendation for asset management group Aberdeen from 'outperform' to 'neutral', saying that the stock is now fairly valued. The bank said that the shares are now largely factoring in the potential earnings accretion from the recently announced deal to buy the Scottish Widows Investment Partnership (SWIP) business from Lloyds.Barclays Capital was weighing on the share price of High Street retailer Debenhams after downgrading its rating from 'equal weight' to 'underweight', saying it sees 18% downside to the current share price. The bank raised concerns about "margin-erosive" sales online cannibalising store sales, and said that share buybacks will likely be postponed until 2016.After an earlier rise, utility providers Centrica and SSE fell after the government announced changes to obligations that are paid through energy bills to offset the rising cost of living across the UK. Both companies said that they would pass on savings to customers, with bills set to rise by a smaller rate than initially estimated.Consumer products giant Unilever was also in the red after its Chief Executive Officer (CEO) Paul Polman was quoted as saying that the slowdown being seen in the emerging markets (EM) could "a few years". The company warned in September about an EM slowdown weighing on sales in the second half.Banking group Lloyds gained after announcing that Lord Blackwell will succeed Sir Winfried Bischoff as Chairman as of April next year. Meanwhile, investment and wealth management firm Rathbone Brothers fell after the news that its long-running CEO Andy Pomfret is to retire next year.Mining stocks were under pressure as commodity prices declined with precious metals peers Fresnillo and Randgold tracking gold and silver lower early on.FTSE 100 - RisersLloyds Banking Group (LLOY) 78.38p +1.27%Tullow Oil (TLW) 874.50p +0.57%TUI Travel (TT.) 369.10p +0.49%Royal Bank of Scotland Group (RBS) 328.50p +0.40%Barclays (BARC) 272.65p +0.35%International Consolidated Airlines Group SA (CDI) (IAG) 367.40p +0.30%Vodafone Group (VOD) 227.45p +0.29%London Stock Exchange Group (LSE) 1,631.00p +0.25%Whitbread (WTB) 3,573.00p +0.17%GlaxoSmithKline (GSK) 1,619.50p +0.06%FTSE 100 - FallersSainsbury (J) (SBRY) 395.60p -2.90%Tesco (TSCO) 338.55p -2.70%Mondi (MNDI) 979.50p -2.54%Morrison (Wm) Supermarkets (MRW) 258.80p -2.52%Shire Plc (SHP) 2,706.00p -2.38%Fresnillo (FRES) 815.00p -2.16%Meggitt (MGGT) 488.50p -2.12%Randgold Resources Ltd. (RRS) 4,258.00p -2.02%Petrofac Ltd. (PFC) 1,241.00p -1.97%Aberdeen Asset Management (ADN) 483.20p -1.85%FTSE 250 - RisersCranswick (CWK) 1,166.00p +2.19%Hochschild Mining (HOC) 144.40p +1.62%Enterprise Inns (ETI) 140.20p +1.59%NMC Health (NMC) 412.40p +1.25%Daejan Holdings (DJAN) 4,355.00p +1.23%Ted Baker (TED) 2,026.00p +1.20%Genus (GNS) 1,258.00p +1.13%BH Global Ltd. USD Shares (BHGU) 11.95 +1.10%Greencore Group (GNC) 194.60p +1.09%BH Macro Ltd. USD Shares (BHMU) 20.04 +1.01%FTSE 250 - FallersDebenhams (DEB) 92.65p -4.24%Telecom Plus (TEP) 1,806.00p -3.83%Keller Group (KLR) 1,022.00p -3.49%Halfords Group (HFD) 472.00p -3.36%Hiscox Ltd (HSX) 657.50p -3.02%IP Group (IPO) 186.40p -2.92%Carpetright (CPR) 585.00p -2.82%Shaftesbury (SHB) 601.00p -2.51%Devro (DVO) 287.40p -2.51%Ocado Group (OCDO) 398.90p -2.47%BC