(Alliance News) - Equity prices in London made a slow start to an abbreviated trading week, closing mixed on Tuesday with sentiment subdued by weakness in travel stocks as well as abject economic data from China.
"Equities earlier appeared to still be riding the Powell wave in the absence of much else so late in the summer. But that appears to have faded throughout the morning in Europe. Things should pick up again going into the Fed meeting in a few weeks, and the coming days does have a lot of data on offer. But the start of this week is lacking a little, especially when combined with the UK bank holiday on Monday," OANDA analyst Craig Erlam commented.
The FTSE 100 closed down 28.31 points, or 0.4%, at 7,119.70 on Tuesday. The large-cap index gained 1.2% in August, a return to form after giving back around 0.1% in July.
The FTSE 250 rounded off a strong August with another record close, however. The mid-cap index ended up 42.47 points, or 0.2%, at 24,102.19. The FTSE 250 rose 5.0% in August, a month which saw the mid-cap benchmark top 24,000 points for the first time.
The AIM All-Share closed up 11.76 points, or 0.9%, at 1,292.99 on Tuesday.
The Cboe UK 100 ended down 0.5% at 707.71, the Cboe UK 250 closed marginally higher at 21,881.01, and the Cboe Small Companies ended up 0.3% at 15,566.14.
The CAC 40 in Paris closed down 0.1% on Tuesday, while the DAX 30 in Frankfurt lost 0.3%. On Monday, Frankfurt's blue-chip index gained 0.2%, while the Paris benchmark rose 0.1%.
The FTSE 100 spent much of Tuesday's session in the red, while the CAC and DAX slipped into negative territory in the early afternoon.
Interactive Investor analyst Richard Hunter noted London's blue-chip index was hurt by "some weakness in the banks and also airline and related stocks."
Lender NatWest gave back 2.6%, peer HSBC fell 2.2%, while British Airways parent International Consolidated Airlines Group lost 2.7%. Among mid-caps, budget carrier Wizz Air was among the worst performers, falling 2.5%.
Airlines were hurt after the EU on Monday recommended that its member states reimpose travel restrictions on US tourists over rising Covid infections in the country.
Economic data from China on Tuesday also hurt sentiment. China's services sector contracted in August for the first time since the start of the pandemic while factory activity slowed further, data showed, as domestic travel curbs hit demand for transport and tourism.
The non-manufacturing purchasing managers' index, a key gauge of activity in China's services and construction sectors, fell to 47.5 in August from July's 53.3, the National Bureau of Statistics said. The measure for factory activity, manufacturing PMI, came in at 50.1 in August from July's 50.4.
"Hopefully US jobs data this week will give equities a lift, allaying fears that the global economy is hitting a rough patch," IG markets analyst Chris Beauchamp commented.
Equities in New York were mixed at the time of the closing bell in London on Tuesday. The Dow Jones Industrial Average was up 0.1% the S&P 500 was marginally lower, but the Nasdaq Composite was down 0.1%.
"The month is ending with weakness for European markets, with US markets also running out of upward momentum for the time being. Undoubtedly month-end rebalancing will get the blame, and a low reading on US consumer confidence will also be in the frame for why Wall Street is down," Beauchamp added.
Consumer confidence in the US slipped to a six-month low in August, according to figures from the Conference Board on Tuesday.
The Conference Board's consumer confidence index fell to 113.8 points, down from the 125.1 tally in July.
"Consumer confidence retreated in August to its lowest level since February 2021 (95.2)," Conference Board Senior Director of Economic Indicators Lynn Franco said.
"Concerns about the Delta variant - and, to a lesser degree, rising gas and food prices - resulted in a less favourable view of current economic conditions and short-term growth prospects. Spending intentions for homes, autos, and major appliances all cooled somewhat; however, the percentage of consumers intending to take a vacation in the next six months continued to climb."
The present situation indicator, a measure of how consumers view current market conditions, fell to 147.3 in August from 157.2 in July.
Back in London, Bunzl fell 1.6% after the distribution firm pointed to a "reversal in Covid-19 related sales", despite a rise in interim earnings.
For the six months that ended June 30, revenue was GBP4.87 billion, up 0.4% from GBP4.85 billion last year and pretax profit was GBP275.7 million, up 12% from GBP245.4 million.
Chief Executive Officer Frank van Zanten said the reversal "has been more than offset by the recovery experienced in our base business over the first half. The group's performance over the first half and the excellent underlying revenue growth we have delivered over a two-year period demonstrate the resilience of our diversified portfolio."
Elsewhere in London, Blue Prism jumped 36% as the AIM-listed firm said it is in talks with TPG Capital and Vista Equity Partners over possible takeover offers.
Warrington-based Blue Prism, a maker of software to automate back-office tasks, has a market capitalisation of GBP1.09 billion.
Each of TPG and Vista now have until September 28 to make a firm offer or walk away, under London takeover rules.
The pound was quoted at USD1.3753 at the London equities close on Tuesday, largely flat from USD1.3752 on Friday. The euro rose to USD1.1802 from USD1.1788. Against the yen, the dollar climbed to JPY110.01 from JPY109.92.
Brent oil was quoted at USD72.12 a barrel late Tuesday, from USD72.28 at the same time on Friday. Gold slipped to USD1,805.13 an ounce, from USD1,807.81.
Wednesday's economic calendar has a raft of manufacturing PMI data, including China overnight, the eurozone at 0900 BST, the UK at 0930 BST and the US at 1445 BST. In addition, EU unemployment data is released at 1000 BST.
The local corporate calendar has half-year results from gambling firm 888 Holdings, gold miner Petropavlovsk and textile rentals company Johnson Service Group. IT services provider Kainos Group and retailer WH Smith release trading statements.
By Eric Cunha; ericcunha@alliancenews.com
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