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(Alliance News) - Positive data on the factory sector in China lifted London-listed mining stocks at Wednesday's open, helping to offset a decline in housebuilders to keep the FTSE 100 positive.
The large-cap index opened up 38.88 points, 0.5%, at 7,915.16. The FTSE 250 was up 26.76 points, 0.1%, at 19,930.04, but the AIM All-Share was down 0.5 of a point, 0.1%, at 858.87.
The Cboe UK 100 was up 0.5% at 792.56, the Cboe UK 250 was up 0.3% at 17,490.24, and the Cboe Small Companies was up 0.1% at 14,111.25.
In European equities, the CAC 40 index in Paris and the DAX 40 in Frankfurt both were up 0.4%.
The FTSE 100 was also boosted by a weaker pound, which gave up Tuesday's gains that had been thanks to progress in talks between the UK and EU over Northern Ireland.
Sterling was quoted at USD1.2085 early Wednesday, down from USD1.2118 at the London equities close on Tuesday.
By contrast, the euro and yen were both higher. The euro traded at USD1.0638, higher than USD1.0613, and the dollar was quoted at JPY135.98, down versus JPY136.11.
In Asia on Wednesday, the S&P/ASX 200 stock index in Sydney closed down 0.1%. In China, the Shanghai Composite added 1.0%, while the Hang Seng index in Hong Kong finished 4.2% higher.
This came as survey results showed that China's factories returned to growth in February, amid the loosening of pandemic restrictions.
The Caixin manufacturing purchasing managers' index rose to 51.6 points in February from 49.2 in January. Crossing over the 50-point no-change mark, it shows the sector is now in a state of modest growth. The latest reading on the strength of China's factory sector was better than the market consensus forecast of 50.2, as cited by FXStreet.
"The Covid crisis is receding rapidly in the rear-view mirror and demand for raw materials to keep factory lines rolling is expected to be brisk," said Hargreaves Lansdown's Susannah Streeter.
The improved outlook for demand from China boosted London's mining stocks. Anglo American rose 5.0%, Antofagasta 3.3%, Rio Tinto 3.8%, Glencore 3.3%, and Endeavour Mining 1.7%.
Japan's factories aren't doing as well. The Japanese manufacturing sector saw a sharper downturn in February, with the latest au Jibun Bank manufacturing PMI falling to 47.7 points from 48.9 points in January - showing the sharpest deterioration in the sector since September 2020.
The Nikkei 225 index closed up 0.3% in Tokyo.
Meanwhile, UK house prices fell in February from a year before, according to a mortgage lender. The Nationwide House Price Index fell 1.1% on an annual basis in February, compared to a 1.1% rise seen in January. On a monthly basis, prices fell 0.5% in February, slowing slightly from a 0.6% decline in January. It was the sixth consecutive monthly decline.
"Buyers are bossing it in the market right now. They know they have the upper hand, given overall interest is so weak so they are clearly bullish about getting reductions from sellers," HL's Streeter commented.
The average price of a UK house was GBP257,406, down from GBP258,297 in January. House prices in February were 3.7% below their August peak.
The news drove down blue-chip housebuilders, with Barratt shedding 3.4%, and Taylor Wimpey 2.4%.
Persimmon was the worst performer, plunging 7.8% in early trading.
The housebuilder on Wednesday warned of a squeeze on margins to come in a "tough" year ahead.
Persimmon said revenue rose 5.7% to GBP3.82 billion in 2022 from GBP3.61 billion in 2021. Pretax profit fell 24% to GBP730.7 million from GBP966.8 million, however. This reflects a GBP275.0 million increase in Persimmon's provision for building safety remediation, which relates to flammable cladding.
Looking ahead, Persimmon said its current outlet network would imply 8,000-9,000 legal completions in 2023, but it is too early for any certainty. Margins could be hit by around 500 basis points by lower average selling prices and cost inflation, with another 800 basis point hit from reduced volumes and increased sales incentives and marketing costs.
The firm's outlook was "troubling", according to interactive investor's Richard Hunter.
"Concerns over mortgage affordability, given the cost of living crisis, mortgage availability amid rising interest rates, persistent build cost inflation of between 8% and 10% and shortages of both materials and labour, have created a toxic cocktail," he explained.
Persimmon proposed a 60p final dividend, which will be the only payout for 2022.
At the other end of the FTSE 100 index was Weir, up 7.5%.
The Glasgow-based engineering company said annual revenue rose 28% year-on-year to GBP2.45 billion in 2022, as pretax profit jumped 24% to GBP260 million. Weir boasted of a record order book starting 2023, and raised its final dividend by 57% to 19.3p. Weir is paying 32.8p in total for 2022, up 38% from 23.8p in 2021.
"We are growing faster than our markets, strengthening margins and cash and reducing our CO2 footprint," said Weir CEO Jon Stanton.
In the FTSE 250, Aston Martin Lagonda was the top performer, up 6.7%.
The luxury sports car maker rounded off 2022 with a stronger final quarter. In the year as a whole, revenue rose 26% to GBP1.38 billion from GBP1.10 billion, but pretax loss widened to GBP495.0 million from GBP213.8 million.
In the fourth quarter, revenue rose 46% to GBP524.3 million, and the firm swung to a pretax profit of GBP16.3 million from a GBP25.2 million loss.
Aston Martin said it exited 2022 with "the strongest order book in many years".
Elsewhere, Just Eat Takeaway.com fell 3.8%.
The food delivery company said revenue rose 4.3% year-on-year to EUR5.56 billion from EUR5.33 billion. Pretax loss widened to EUR5.77 billion from EUR1.05 billion, however.
This was mostly due to impairment losses of EUR4.6 billion related to the Grubhub acquisition and merger of Just Eat and Takeaway.com, which Just Eat Takeaway blamed on macroeconomic factors, including rising interest rates.
"Management, together with its advisers, continues to actively explore the partial or full sale of Grubhub," Just Eat Takeaway said.
On AIM, Inland Homes homes dropped 21%.
The brownfield site developer, housebuilder and regeneration specialist said its chair, Simon Bennett, alongside other non-executive directors have resigned with immediate effect.
Inland said it has become aware of "certain related-party issues" of which its board was not informed at the relevant times.
Bennett will stay on as a director for a maximum of two weeks in order to fulfil the minimum number of directors, while the company arranges permanent appointments.
Should the process take longer than two weeks, Inland risks the suspension of trading in its shares. Inland maintained that this is an "unlikely" scenario.
It currently intends to re-appoint one of its founders and former CEO Stephen Wicks to the board, following due diligence checks.
In the US on Tuesday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.7%, the S&P 500 down 0.3% and the Nasdaq Composite 0.1% lower.
The Dow is down 1.5% so far in 2023, but the S&P 500 is up 3.8% and the Nasdaq up 10%, both thanks to a good January.
Still to come on Wednesday's economic calendar, there are more manufacturing PMIs to come, from the EU, UK, and the US.
By Elizabeth Winter, Alliance News senior markets reporter
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