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LONDON (Alliance News) - UK stock indices are under-performing their European counterparts midday Monday, with London's heavily-weighted resource sector holding back gains elsewhere, as commodities prices fall on weak manufacturing data from China.

The FTSE 100 is down 0.1% at 6,689.40, the FTSE 250 trades down 0.2% at 17,655.39, and the AIM All-Share index also is down 0.1% at 750.80.

In Europe, the French CAC 40 is up 0.6% and the German DAX 30 is up 0.7%. US futures indicate Wall Street for a lower open, with the DJIA, S&P 500 and the Nasdaq 100 all called 0.1% lower.

Activity in China's vast manufacturing sector contracted further to a two-year low in July, due to renewed declines in total new work and new export orders, the latest survey from Caixin and Markit Economics showed. The final purchasing managers' index reading dropped to 47.8 from 49.4 in June.

The report followed downbeat official PMI figures released by the statistics bureau over the weekend, which showed that growth at big manufacturing firms unexpectedly stalled last month, with the PMI falling to 50.0 in July from June's sluggish growth reading of 50.2.

On Monday, the Shanghai Composite index closed down 1.1% in response to the disappointing data, while Hong Kong's Hang Seng index dropped 0.9%.

The manufacturing PMIs weighed on commodities markets, with Brent oil falling to a six-month low of USD50.83 a barrel and metal prices also slumping on the data.

The slump has seen the London-listed shares of miners and oil companies fall. In the FTSE 100, Glencore trades down 2.5%, having hit a new all-time low, Anglo American trades down 2.3%, and BP is down 1.0%. In the FTSE 250, KAZ Minerals is down 4.1%, Nostrum Oil & Gas is down 3.3% and Lonmin is down 3.2%. The FTSE 350 mining sector index is down 2.1%.

Investors attention also is on Greece again after the country re-opened its stock market following a month of closure. Stocks immediately fell at the open, with the banking sector in particular showing heavy declines.

"The uncertain solvency of Greek banks had investors moving hand over fist to dump the shares as quickly as possible before the Athens Stock Exchange's maximum loss for an individual issue was reached and trading halted. Fortune favours the brave so there may be some investors bottom-fishing in select Greek stocks, perhaps in safe-havens like utilities or exporters who could benefit from a weak euro," says Jasper Lawler, market analyst at CMC Markets.

The stock market was closed as part of the capital controls imposed by the Greek government on June 29 to prevent money from fleeing the country and a collapse of the banking system.

Meanwhile, talks continued between Greece's finance and economy ministers and the representatives of the country's creditors on a new multi-billion-euro bailout. The Greek government said it intends to conclude negotiations with creditors over the new bailout by August 18, two days before a payment of EUR3.2 billion is due to the European Central Bank.

On the UK corporate front, Intertek shares are up 12%, by far the best performer in the FTSE 100. The inspection, testing and certification services company said its pretax profit rose in the first half of 2015 on the back of margin improvements and better revenue.

The company said its pretax profit for the six months to the end of June was GBP139.1 million, up from GBP119.8 million a year earlier, driven by its revenue edging up to GBP1.06 billion from GBP1.02 billion and by an improvement in its margins, with its operating margin up to 14.5% from 12.8% in the half.

Rolls-Royce Holdings shares also are continuing their recent run of gains, up 4.5%, after the Financial Times reported Friday that San Francisco-based activist hedge fund ValueAct became the aerospace and engineering group's largest shareholder in a move likely to increase the pressure on the company to improve its performance and accelerate cost-cutting measures. Rolls-Royce has issued a series of profit warnings in the past year thanks to slowdown on key engine programmes and weakness in defence budgets.

HSBC Holdings shares have given up most of their earlier gains but still trade up 0.4%. The bank said that its pretax profit increased by 10% in the first half, as a strong showing in Asia more than offset a USD1.14 billion charge for settlements and provisions in connection to legal matters, and that it has agreed to sell its Brazilian operations to Banco Bradesco for USD5.2 billion.

HSBC reported a USD13.63 billion pretax profit for the six months to the end of June, up from the USD12.34 billion reported for the first half of 2014. HSBC's interim dividend remained at USD0.20 per share. Revenue, defined as net operating income before loan impairment charges and other credit risk provisions, increased to USD32.94 billion from USD31.17 billion.

The results come nearly two months after the global banking giant revealed plans to save between USD4.5 billion and USD5.0 billion per year by 2017, cut risk-weighted assets by a quarter, and redeploy freed up capital to more profitable business, and sell its loss-making operations in Brazil and Turkey.

In the FTSE 250, Fidessa Group leads the fallers, trading down 10%. The trading, investment and information company said the additional investment it is making in new opportunities is having a "small impact" on its operating margin, and said there may be greater pressure arising going into 2016 from potential consolidation activity amongst its customers.

Ultra Electronics trades up 1.7% after the defence company posted a big fall in pretax profit for the first half of the year, hit by a writedown due to the loss of its contract in Oman and by continued subdued activity in the US and UK defence markets. But despite the loss, the company said its results were in line with its expectations and it said its second half is set to be in line with its guidance.

In the AIM All-Share, Irish mobile payments and marketing company Zamano said it has received an approach about a possible takeover. In a short statement, Zamano said it has received a "preliminary and highly conditional approach regarding a possible takeover offer" for EUR0.20 per share. The company currently trades up 19% at 11.60 pence.

Fox Marble Holdings, is one of the biggest fallers down 18%. The marble quarrying and finishing company said a fire has destroyed equipment that was meant to be shipped to it by Prometec, which will result in a further delay to the start of operations while the company sources alternative machines. The company said that though the direct financial loss it will face is minimal, its revenue for the full year will take a hit.

Still ahead in the economic calendar are US personal income, consumption and expenditure data at 1330 BST, before the Institute for Supply Management manufacturing PMI at 1500 BST, alongside US construction spending. The US Markit manufacturing PMI is at 1445 BST.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

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