LONDON (Alliance News) - The FTSE 100 closed lower Friday, erasing early gains as a series of weak economic reports from the US weighed on investor sentiment.
The blue-chip index closed down 0.2% at 6,960.49. Over the course of the week, the FTSE 100 lost 1.2%, as volatility in bond markets led to a fall in equities. The mid-cap FTSE 250 managed to cling onto some of its earlier gains, closing up 0.5% at 18,020.42, a new record high close. The AIM All-Share also ending higher, up 0.3% at 762.00.
European equity markets performed worse than London, with the French CAC 40 ending off 0.7% and the German DAX 30 down 1.0%.
At the London close, Wall Street also was trading lower, with the DJIA, and S&P 500 both down 0.1% and the Nasdaq Composite, down 0.2%, after having opened with gains.
The first miss in US economic data came with the New York Manufacturing Index, which rebounded by less than expected in May. The New York Federal Reserve Bank said its general business conditions index climbed to a positive 3.1 in May from a negative 1.2 in April, with a positive reading indicating growth in regional manufacturing activity. However, economists had been expecting the index to show a more significant improvement to a reading of positive 5.0.
The disappointment seen in the New York manufacturing sector was echoed in US industrial production, which showed a continued decrease in April, according to the Federal Reserve, with the drop reflecting declines in mining and utilities output. The report said industrial production fell by 0.3% in April, matching the upwardly revised decrease seen in March. Economists had expected production to come in unchanged compared to the 0.6% drop originally reported for the previous month.
Finally, reflecting decreases in the assessment of current conditions and the economic outlook, the University of Michigan released a report showing a substantial decrease in US consumer sentiment in May. The preliminary reading of the consumer sentiment index showed it fell to 88.6 in May from 95.9 in April, while economists had expected the index to edge down to 95.8.
Garry White, chief markets commentator at Charles Stanley, said that, following the weak preliminary reading of US GDP in the first-quarter, investors had been hoping for a more positive start to the second quarter. However, with the continued weak economic data from the US, this looks less likely, White said.
On the London Stock Exchange, oil-related stocks were amongst the worst performers amid a decline in the price of oil. US benchmark West Texas Intermediate fell below the psychological USD60 a barrel mark and at the London close traded at USD59.26 a barrel. Brent traded at USD66.33 a barrel.
Royal Dutch Shell 'B' shares fell 1.4%, and BP lost 1.0%. In the FTSE 250, Premier Oil closed down 3.2%, Hunting down 2.5%, and Tullow Oil down 2.3%.
Bwin.Party Digital Entertainment shares leapt higher, closing up 11%, the biggest gainer in the FTSE 250. Bwin confirmed it is in talks with numerous third parties about potentially being acquired. In a statement, bwin said it has received revised proposals, including from GVC Holdings, over a "variety of possible business combinations".
AIM-listed GVC Holdings, an Isle of Man-based sports betting and gaming company whose brands include Sportingbet, said it has submitted a proposal with a view to acquiring the FTSE 250 online gaming company. However, both companies said there can be no certainty of a deal going through. The statements were issued following press reports and market rumours about a bid for bwin, which had already seen the stock trading up around 6% before the confirmation.
GVC shares closed up 0.8%.
Coca-Cola HBC went from being the best performer in the FTSE 100 to closing as the second worst, ending down 1.8%. Prior to the market open, the second-largest bottler of products made by US drinks group The Coca-Cola Co said its net sales revenue rose in the first quarter, with volumes higher due to extra selling days and an early Easter, though it faced a mixed effect from currency fluctuations across its operations.
However, analysts at Nomura said Coca-Cola HBC's underlying trading was weaker than expected and estimated that volumes would have been flat if the number was adjusted to exclude the earlier timing of Easter and the four extra selling days.
In the economic calendar Monday, there are Japanese industrial production and capacity utilisation figures at 0530 BST, the German Bundesbank monthly report at 1200 BST, and the US National Association of Home Builders housing market index at 1500 BST.
In the UK corporate calendar, full-year results are due from FTSE 100 engineering outsourcer Babcock International Group, as well as from FTSE 250 outsourcer Mitie Group, imaging technology company e2v Technologies and food company Cranswick.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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13 Dec 2016 16:08
