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(Alliance News) - London share prices were unable to hold on to morning gains, slipping into the red by midday on Wednesday, with weak European and UK manufacturing data compounding the impact of similarly disappointing stats out of China and Japan.
The FTSE 100 index was down 30.72 points, or 0.4%, at 7,578.18 midday Wednesday. The mid-cap FTSE 250 index was down just 1.49 points at 20,416.84. The AIM All-Share index was down 1.48 points, or 0.2%, at 974.26.
The Cboe UK 100 index was down 0.2% at 754.73. The Cboe 250 was up 0.2% at 18,110.38 and the Cboe Small Companies was up 0.2% at 14,660.47.
In mainland Europe, the CAC 40 in Paris was up slightly and the DAX 40 in Frankfurt advanced 0.2%.
Wednesday is the last day of trading for London ahead of a four-day holiday weekend for the Queen's Platinum Jubilee.
"By the time investors have returned after the festivities, they could be facing a big hangover depending on the turn Wall Street takes over the next few days and the latest US jobs reading due on Friday. Inflationary concerns look set to continue to dominate the market mood," AJ Bell investment director Russ Mould said.
The US nonfarm payrolls report for May will be published at 1330 BST on Friday.
Wall Street was headed for a mixed start on Wednesday. The Dow Jones Industrial Average is called up 0.3%, S&P 500 up 0.1%, but the Nasdaq Composite is seen opening 0.1% lower.
Interactive investor analyst Richard Hunter said: "Non-farm payroll figures at the end of this week will receive their usual investor scrutiny and, in particular, whether the Fed hikes so far are having any impact on an otherwise robust jobs market. The consensus is for 350,000 jobs to have been added in May, as compared to the addition of 428,000 in April."
The downbeat mood was confirmed by slowing growth in the UK manufacturing sector, with a hit to demand leading to a seven-month low for output.
The seasonally adjusted S&P Global-CIPS UK manufacturing purchasing managers' index score was 54.6 points in May, unchanged from the earlier flash estimate and down from 55.8 in April. The reading was in line with market forecasts, according to FXStreet.
S&P noted the sector was hit by falling output, new orders and employment. "The slowdown was driven by weaker growth of domestic demand, lower intakes of new export work and ongoing disruption caused by stretched supply chains, rising cost pressures and the war in Ukraine."
Rob Dobson, director at S&P Global Market Intelligence, said manufacturing firms faced a "barrage of headwinds" during the month.
The disappointing UK figures followed data showing China's manufacturing sector contracted in May for the third month running.
Following the posting of a rise in the PMI for China's manufacturing sector by the National Bureau of Statistics on Tuesday, an alternative PMI compiled by business magazine Caixin broadly followed suit, showing a slight rise from 46 points in April to 48.1 points for May.
Japanese manufacturers indicated that operating conditions improved at a solid rate in May, albeit not so strongly as the month before, survey results showed on Wednesday. The headline au Jibun Bank Japan manufacturing purchasing managers' index dipped slightly to 53.3 points in May from 53.5 in April.
In the eurozone, the S&P Global manufacturing PMI fell to 54.6 points in May from 55.5 in April
In London, Dr Martens was the standout performer, surging 23% in the FTSE 250.
The footwear and clothing company posted annual earnings ahead of market expectations, aided by the reopening of stores as Covid restrictions eased, and has guided for continued strong sales growth.
For the financial year that ended March 31, pretax profit surged to GBP214.3 million from GBP69.7 million the year prior. Revenue rose to GBP908.3 million from GBP773.0 million.
Dr Martens declared an annual dividend of 5.5 pence, compared to none the year before.
"Today's strong results have been driven by our proven [direct to consumer]-first strategy and continue to build upon our track record of volume-led growth. When we listed, we committed to deliver high-teens revenue growth, and today we are pleased to report 22% constant currency growth and Ebitda ahead of market expectations. Our results were achieved against unprecedented Covid-19 disruption in our supply chain, which our teams navigated with flexibility and dedication," Chief Executive Kenny Wilson said.
Looking to financial 2023, Dr Martens guided for revenue growth in the high-teens.
Capricorn Energy was up 3.8% after it agreed to an all-share merger with fellow FTSE 250 energy firm Tullow Oil.
Tullow was up 2.2%.
Under the deal terms, Capricorn shareholders will receive 3.8068 new Tullow shares for each Tullow share, giving Capricorn shareholders 47% of the enlarged firm.
Tullow Oil has a market cap of about GBP795 million, while Capricorn - formerly known as Cairn Energy - has a market cap of about GBP645 million.
"The boards of Tullow and Capricorn believe the combination has compelling strategic, operational and financial rationale, with the ability to deliver substantial benefits to shareholders, host nations and other stakeholders," Tullow said in the statement.
"The combination represents a unique opportunity to create a leading African energy company, listed in London, with the financial flexibility and human resource capability to access and accelerate near-term organic growth, add new reserves and resources cost-effectively, generate significant future returns for shareholders, and pursue further consolidation".
The pair guided for pre-financing free cash flows of USD2.4 billion from 2022 to 2025 following the merger.
On AIM, Location Sciences shares sank 20%. The London-based location data verification said it continues to explore options for acquisition candidates.
Chair Simon Wilkinson said it has been a "challenging few months" for the firm.
"Rather than focusing on the quickest strategy, the board remains committed to securing an opportunity that maximises shareholder value and growth in the medium to long term. Whilst the current economic climate and the ongoing conflict in Ukraine have made the process more challenging than anticipated, the board is confident in delivering shareholder value," it added.
It stressed a plan to retain access to the "necessary skills and resources" to enable the ongoing operation of Location Sciences generally, and its Verify business, on a consultancy basis via a third-party contractor.
Impax Asset Management was down 9.4% on AIM as its thematic Environmental Markets strategies underperformed their benchmarks in the latter period of its first half.
Impax reported GBP2.5 billion of net inflows in the six months to the end of March, reflected in new mandates and increased investments into existing accounts in North America, Europe and Asia-Pacific.
Assets under management as at March 31 were GBP38.02 billion, up 2.2% from GBP37.21 billion at the end of September, and 27% higher from GBP30.00 billion the same date a year before.
Although most of Impax's strategies performed strongly over the first three months of the period, in the latter half the trust's first half, Environmental Markets strategies lagged behind their benchmarks - with Water underperforming the MSCI All Country World Index by 5.5%, Sustainable Food by 5.7%, Leaders by 7.9%; and Specialists by 9.2%.
Brent oil quoted at USD117.00 a barrel at midday in London, down sharply from USD123.75 late Tuesday, but was clawing back some losses as it was seen around USD115 before the London equities market open on Wednesday.
Gold was priced at USD1,832.30 an ounce, down from USD1,845.51.
The pound was quoted at USD1.2592 midday Wednesday in London, down from USD1.2605 at the London equities close on Tuesday. The euro stood at USD1.0715, soft from USD1.0722.
Against the yen, the dollar was trading at JPY129.35, higher on JPY128.50.
Still to come on Wednesday, there is manufacturing PMI data from the US at 1445 BST, followed by a Bank of Canada interest rate decision at 1500 BST.
By Paul McGowan; paulmcgowan@alliancenews.com
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