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LONDON MARKET CLOSE: Choppy trading as poor PMI data fuels growth fear

Fri, 01st Jul 2022 16:59

(Alliance News) - Equities in London managed to avert some of the hefty sell-offs seen in the first half of the year, but struggled for direction at the start of the third quarter, as investors chewed on a slew of poor manufacturing readings from across the globe on Friday.

The manufacturing economies in the UK, US and eurozone all slowed in June, figures showed. The latter, meanwhile, saw inflationary pressures intensify once more.

The FTSE 100 index closed down just 0.63 of a point at 7,168.65 on Friday. The index had been 0.5% lower roughly an hour before the closing bell, but managed to recover from afternoon lows before the end of a volatile session.

The FTSE 250 ended down 29.80 points, or 0.2%, at 18,636.98 and the AIM All-Share closed down 1.01 points, 0.1%, at 875.21.

For the week, the FTSE 100 lost 0.6%, the FTSE 250 shed 2.6% and the AIM All-Share fell 2.4%.

The Cboe UK 100 ended down 0.2% at 713.63, the Cboe UK 250 closed down 0.6% at 16,213.00, though the Cboe Small Companies inched up 0.1% to 13,282.95.

In European equities on Friday, the CAC 40 in Paris and DAX 40 in Frankfurt, also seeing a late recovery, ended up 0.2%.

Trading was choppy on Friday.

Europe's blue-chip benchmarks recovered from a sluggish start to climb into the green before the morning ended.

However, they fell into the red in the early afternoon, climbed back into positive territory shortly after the open in New York, but struggled once again as early gains in the US proved fleeting.

Buying action in the final hour of the European session lifted blue-chip benchmarks, however.

At the time of the closing bell in London, US stocks were lower. The Dow Jones Industrial Average was down 0.3%, while the S&P 500 and Nasdaq Composite were each 0.2% lower.

"The losses of the first half do not seem to have created any immediate desire to buy the dip, it seems. An initial recovery for US markets from the lows of the morning has given way to more losses, and even the prospect of a long weekend in the US hasn’t tempted the dip buyers in," IG analyst Chris Beauchamp commented.

Hurting sentiment on Friday was a trio of poor manufacturing purchasing managers' index readings.

The S&P Global-CIPS UK manufacturing purchasing managers' index fell to 52.8 in June from 54.6 in May and was revised down from an initial estimate of 53.4. It was the lowest reading in two years.

S&P said the slowdown in the UK manufacturing sector continued at the end of the second quarter, as June saw output growth grind to a near-standstill pace and new orders contract for the first time in 17 months.

In addition, S&P said inflationary pressures remained elevated due to raw material shortages, stretched supply chains, higher prices for commodities, electronics, energy, oil, paper, plastics and timber.

Meanwhile, the manufacturing sector in the eurozone had a rough month in June, data from S&P Global showed, as firms faced slowing demand and a drop in new orders.

The S&P Global eurozone manufacturing purchasing managers' index fell to 52.1 in June from 54.6 in May, which represents a 22-month low. Any reading over the no-change mark of 50.0 indicates growth, signalling that June's rate of expansion slowed significantly compared to May.

The pound was quoted at USD1.2034 at the time of the London equities close on Friday, down from USD1.2157 on Thursday. The euro was priced at USD1.0406, down from USD1.0456.

The single currency had initially spiked following another red-hot eurozone inflation print, but struggled to maintain that momentum and at one point sunk to USD1.0367 - its lowest level in two weeks.

Consumer inflation in the eurozone is expected to tick higher in June, data from the statistical office of the EU showed, piling further pressure on the European Central Bank to rein in spiralling prices.

Euro area annual inflation is expected to be 8.6% in June 2022, accelerating from 8.1% in May, according to a flash estimate from Eurostat. Market consensus, cited by FXStreet, had seen inflation at 8.3%.

"The fact that inflation so variant across the zone means it will be uncomfortable for the likes of Germany and France to back aggressive hikes from the ECB while also allowing the central bank to buy bonds of peripheral countries to mitigate the bond market sell-off in those nations. What all this points to is messy monetary policy and potentially political disorder. Against this backdrop, and given tensions related to the war in Ukraine and now Nato's expansion, it makes it a difficult environment for investors to confidently invest in the eurozone," City Index and FOREX.com Fawad Razaqzada commented.

"With the 1.05 handle broken, you would feel that the EUR/USD is now almost certain to drop to a new low for the year, after a very poor performance in the first half of the year."

Against the safe haven Japanese yen, the dollar was trading at JPY135.19, lower against JPY135.89.

The US manufacturing sector's growth slowed to a two-year low in June, figures on Friday showed, as foreign client demand weakened.

The latest S&P Global manufacturing purchasing managers' index fell to 52.7 points in June from 57.0 in May. While remaining above the 50.0 no-change mark, the number suggests growth has slowed. The final figure was above the 52.4 flash estimate.

Business confidence slowed to the lowest level since October 2020, as firms bemoaned inflationary worries.

Brent oil was quoted at USD110.84 a barrel late Friday, down sharply from USD114.74 a barrel at the London equities close Thursday.

Tracking crude prices lower, Harbour Energy fell 8.3%, while Tullow Oil shed 7.1%, among the worst FTSE 100 and FTSE 250 performers, respectively.

Wizz Air added 6.0%. Redburn upgraded the Hungarian airline to 'buy'.

The wider travel sector had a strong session. Cruise ship operator Carnival added 6.3% and budget airline easyJet rose 2.0%.

MySale which had surged some 30% on Thursday, was on the up once again. Shares more than doubled to 3.50 pence from 1.65p on Thursday.

On Thursday, Sports Direct owner Frasers Group said it acquired a 28.7% holding in the Australian-based fashion marketplace.

Gold was quoted at USD1,806.73 an ounce late Friday, down a touch from USD1,807.91 late Thursday.

Monday's economic calendar has eurozone producer price inflation data at 1000 BST. Financial markets in the US will be closed on Monday for Independence Day.

The week picks up pace on Tuesday with a Reserve Bank of Australia interest rate decision, as well as a slew of services PMI readings. Elsewhere on the central banking front, the latest US Federal Reserve meeting minutes are released on Wednesday. The US nonfarm payrolls report for June is posted on Friday.

Monday's local economic calendar has annual results from filtration, laboratory and environmental technology company Porvair and technology sector-focused investor Augmentum Fintech.

By Eric Cunha; ericcunha@alliancenews.com

Copyright 2022 Alliance News Limited. All Rights Reserved.

More News
7 Nov 2022 15:54

UK earnings, trading statements calendar - next 7 days

Tuesday 8 November 
3i Infrastructure PLCHalf Year Results
Argentex Group PLCHalf Year Results
Associated British Foods PLCFull Year Results
Aveva Group PLCHalf Year Results
Beximco Pharmaceuticals LtdFull Year Results
CNH Industrial NVQ3 Results
Coca-Cola HBC AGTrading Statement
DCC PLCHalf Year Results
Direct Line Insurance Group PLCTrading Statement
Egdon Resources PLCFull Year Results
Hilton Food Group PLCTrading Statement
IMI PLCTrading Statement
Marks Electrical Group PLCHalf Year Results
Oxford Instruments PLCHalf Year Results
Persimmon PLCTrading Statement
Vaalco Energy Inc Q3 Results
Warehouse REIT PLCHalf Year Results
YouGov PLCFull Year Results
Zoo Digital Group PLCHalf Year Results
Wednesday 9 November 
Aviva PLCTrading Statement
Bank of Ireland Group PLCTrading Statement
Biffa PLCHalf Year Results
Conduit Holdings LtdTrading Statement
Dignity PLCTrading Statement
Esken LtdHalf Year Results
FirstGroup PLCHalf Year Results
Flutter Entertainment PLCTrading Statement
Gelion PLCFull Year Results
Georgia Capital PLCQ3 Results
Gym Group PLCTrading Statement
JD Wetherspoon PLCTrading Statement
ITV PLCTrading Statement
Marks & Spencer Group PLCHalf Year Results
MaxCyte IncQ3 Results
Norcros PLCHalf Year Results
Picton Property Income LtdHalf Year Results
Smiths Group PLCTrading Statement
Smiths News PLCFull Year Results
Taylor Wimpey PLCTrading Statement
Tracsis PLCFull Year Results
Volex PLCHalf Year Results
Watches of Switzerland Group PLCHalf Year Results
Thursday 10 November 
3i Group PLCHalf Year Results
Allianz Technology Trust PLCQ3 Results
AstraZeneca PLCQ3 Results
Auto Trader Group PLCHalf Year Results
B&M European Value Retail SAHalf Year Results
Bank of Georgia Group PLCQ3 Results
ConvaTec Group PLCTrading Statement
Domino's Pizza Group PLCTrading Statement
Endeavour Mining PLCQ3 Results
Grafton Group PLCTrading Statement
Haleon PLCQ3 Results
Manolete Partners PLCHalf Year Results
National Grid PLCHalf Year Results
Nightcap PLCFull Year Results
Qinetiq Group PLCHalf Year Results
Regional REIT LtdTrading Statement
Renewi PLCHalf Year Results
Spirent Communications PLCTrading Statement
Smoove PLCHalf Year Results
Tate & Lyle PLCHalf Year Results
TT Electronics PLCTrading Statement
Vistry Group PLCTrading Statement
Young & Co's Brewery PLCHalf Year Results
WH Smith PLCFull Year Results
Friday 11 November 
Beazley PLCHalf Year Results
Permanent TSB Group Holdings PLCTrading Statement
TheWorks.co.uk PLCTrading Statement
Urban Logistics REIT PLCHalf Year Results
Monday 14 November 
Atalaya Mining PLCQ3 Results
Biome Technologies PLCTrading Statement
Cake Box Holdings PLCHalf Year Results
Diversified Energy Co PLCTrading Statement
HgCapital Trust PLCQ3 Results
Informa PLCTrading Statement
Kainos Group PLCHalf Year Results
MySale Group PLCFull Year Results
S4 Capital PLCQ3 Results
Totally PLCHalf Year Results
  
Copyright 2022 Alliance News Limited. All Rights Reserved.

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2 Nov 2022 09:19

IN BRIEF: Frasers to acquire remaining MySale shares after offer close

Frasers Group PLC - Derbyshire, England-based retail and intellectual property group - Will compulsorily acquire remaining MySale Group PLC shares, after its offer for the company closed in London on Tuesday. It now owns or has acceptances for its takeover offer for 95.4% of MySale shares.

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24 Oct 2022 10:24

UPDATE: Frasers ups investment in Hugo Boss to 33%; buys 5% Asos stake

(Alliance News) - Frasers Group PLC on Monday said it increased its investment in German fashion designer Hugo Boss AG to just under a third, while also confirming it has bought a 5% stake in UK online clothing retailer Asos PLC.

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24 Oct 2022 09:01

TOP NEWS: Frasers increases investment in German designer Hugo Boss

(Alliance News) - Frasers Group PLC on Monday said its investment in the shares of German fashion designer Hugo Boss AG is now 4.3%, while it additionally has a 28.5% interest via put options that it has sold.

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24 Oct 2022 07:45

LONDON BRIEFING: Shell seals Qatar gas stake; Pearson trading strong

(Alliance News) - Stocks in London were called to start the new week flat on Monday, while the Hang Seng in Hong Kong slumped after Xi Jinping secured a rare third term as leader of China.

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18 Oct 2022 12:23

Frasers up stake in fashion marketplace MySale to majority holding

(Alliance News) - Frasers Group PLC on Tuesday said its MySale Group PLC offer is now unconditional, as it ups its stake in the Australian-based fashion marketplace to 51%.

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17 Oct 2022 10:19

Frasers boosts stake in MySale target

(Sharecast News) - Frasers Group urged MySale shareholders to accept its £14m takeover offer on Monday, after the British retailer bolstered its stake in the Australian firm.

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12 Oct 2022 15:43

TOP NEWS: MySale board gives up fight against Frasers takeover offer

(Alliance News) - MySale PLC on Wednesday reluctantly recommended Frasers Group PLC's takeover offer to shareholders, after Frasers disclosed a blocking shareholding in MySale on Monday.

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12 Oct 2022 15:07

MySale recommends shareholders accept Frasers bid

(Sharecast News) - Australian fashion marketplace MySale said on Wednesday that it now recommends shareholders accept a takeover offer from Frasers Group, even though it undervalues the business.

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26 Sep 2022 09:46

TOP NEWS: Frasers to make mandatory takeover bid for MySale

(Alliance News) - Frasers Group PLC on Monday said it was making a "mandatory cash offer" for the remaining shares in MySale Group PLC.

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26 Sep 2022 07:47

LONDON BRIEFING: Unilever CEO to step down; RPS backs new takeover bid

(Alliance News) - All eyes will be on the pound when traders in Europe return to desks on Monday, after the UK currency fell to an all-time low during the Asian session.

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16 Sep 2022 17:02

LONDON MARKET CLOSE: Stocks in red; pound plunges on retail sales data

(Alliance News) - Stocks in London ended a difficult week in the red on Friday, as disappointing UK retail sales data sent the pound plunging and painted a gloomy picture about the nation's economy ahead of a major interest decision from the Bank of England next week.

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16 Sep 2022 11:09

AIM WINNERS & LOSERS: MySale up as slams Frasers bid; AfriTin placing

(Alliance News) - The following stocks are the leading risers and fallers on AIM in London on Friday.

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16 Sep 2022 09:16

MySale chairman stands down with immediate effect

(Sharecast News) - Online retailer MySale has rejected a takeover bid from Mike Ashley's Frasers Group, stating it does not consider the terms of the deal to be "fair" or "reasonable".

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16 Sep 2022 08:37

MySale hits out at Frasers takeover bid as chair steps down

(Alliance News) - Frasers Group PLC's bid to take full ownership of online retailer MySale Group PLC received a blow on Friday, after the AIM listing said a GBP14 million bid is too low.

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