Last checked at 
LONDON (Alliance News) - Small-cap stocks are out-performing blue-chips once again Wednesday. The AIM All-Share is managing to stay just about in positive territory, while the larger-cap indices are sliding lower. By mid-morning Monday, the FTSE 100 trades about 0.5% lower at 6,437.80, while the FTSE 250 is down about 0.6%.
A slew of service-sector PMI readings began overnight with China, where numbers showed that the sector is growing at the fastest rate since March. Italian services PMI showed a slight increase in August to 48.8 points, from 48.7 in July, but against a higher forecast of 49.9. The comparable numbers for France showed an increase to 48.9 from 48.6 against 47.7 forecast. Germany also beat expectations, coming in at 52.8, up from 51.3 and against 52.4 forecast, while numbers for the whole Eurozone as a whole rose to 50.7 from 49.8, slightly lower than the forecast 51.0.
Eurozone retail sales have shown a monthly growth of 0.1% in July, slightly missing forecasts for 0.2% growth, while revised second quarter Eurozone GDP has come in unchanged at +0.3%, confirming the single currency area is out of recession.
Another upside surprise to the UK economic recover came Wednesday, as the UK service PMI advanced to 60.5 in August from 60.2 in July, with economists having forecast 59.7. This is the strongest improvement in the index in more than six-and-half years and is the latest a now very long list of strong macro readings for the UK.
Despite the strong data, UK equities are struggling as news reports that US President Obama has secured the backing of two key Congress officials for a military strike in Syria reminded investors of the potential for war. European markets also trade lower as the world waits to see how the US will act. France's CAC40 is down 0.6% and the German DAX off 0.3%.
In the UK equity sectors, mobile telecoms lead the day. In a volatile market following the huge USD130 billion sale of its 45% stake in its joint-venture with Verizon, Vodafone shares now are pushing higher after being the biggest faller on Tuesday.
Ryanair has issued a profit warning which is spreading concern across the airline sector. Airlines have been struggling recently amid rising oil prices. As analysts suggest Ryanair is in the best place to handle fuel-price rises, the Irish company's profit warning is being taken as a bad sign for the sector, with Easyjet and International Consolidated Airlines Group leading the blue chip fallers
The pound continues its rise, breaking above 1.56 against the dollar for a second time this week on the back of the surprise upside to services PMI. Against the euro the pound also continues to gain, now at levels not seen since mid May, the cross currently trades at 0.8440.
Still to come Wednesday: US mortgage approvals at 1200BST and US trade balance numbers at 1330BST.
By Jon Darby; jondarby@alliancenews.com; @jondarby100
Copyright 2013 Alliance News Limited. All Rights Reserved.
