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LONDON (Alliance News) - Stocks in London were slightly lower early Friday morning, but CRH and Vodafone were rallying after positive trading updates, with investors focusing on Purchasing Manager's Index readings from the UK, the eurozone and the US.
The FTSE 100 index was down 0.3%, or 21.57 points, at 6,678.32. The FTSE 250 was down 0.2% at 17,008.44 and the AIM All-Share was flat at 737.96.
Construction materials company CRH was up 4.0%, the biggest blue-chip gainer, after saying it now expects its first-half earnings to be ahead of its previous guidance due to its trading performance in the latter half of the second quarter.
The Irish firm now expects earnings before interest, tax, depreciation and amortisation for the first half of 2016 of EUR1.1 billion. This is higher than its previous expectations of EUR1 billion outlined towards the end of April. CRH will report its first-half results on August 25.
Shares in Vodafone were up 2.7% after the mobile telecommunications giant reiterated its outlook for its current financial year and said it "continued to make good progress" during its first quarter.
In the quarter to end-June, Vodafone reported revenue of EUR13.38 billion, down 4.5% from EUR14.01 billion the year before, due to a 5.3% hit from foreign exchange movements. However, Vodafone's preferred reporting measure, group organic service revenue, rose 2.2%, helped by a strong performance from Africa, the Middle East and Asia Pacific, and a stable performance in Europe.
Vodafone said Europe remained stable despite lower roaming fees, reporting 0.3% growth overall, including a stronger performance in Germany, Spain and Italy, offsetting a decline in the UK. The company said that adoption of 4G continued to drive growth in data, with 4G customers doubled to 52.5 million in the quarter, and data volumes up 63%.
Retailer Marks & Spencer was leading FTSE 100 decliners, down 2.9%, after the stock was cut to Underweight from Equal Weight by Barclays.
CMC Markets chief market analyst Michael Hewson believes both the UK manufacturing and services PMIs, due at 0930 BST, will fall into contraction territory, expecting scores of 47.8 and 48.9, respectively. A reading above 50.0 signals growth in the sector compared with the previous month, while below 50.0 suggests contraction.
According to FXStreet.com, the UK manufacturing PMI is expected to come in at 50.0 for July, following a score of 52.1 in June. Meanwhile, consensus expectations for the services reading are for a score of 49.2, much lower than the 52.3 seen in June.
Already released, Japan's manufacturing sector contracted again in July, but the pace of deterioration slowed, flash survey data from Markit showed. The manufacturing PMI rose to 49.0 in July from 48.1 in June.
The Nikkei 225 index in Tokyo fell 1.1%. In China, the Shanghai Composite dropped 0.9%, while the Hang Seng index in Hong Kong continues down 0.4%.
In Europe, the CAC 40 in Paris was down 0.4% and the DAX 30 in Frankfurt was off 0.5%. Markit manufacturing PMI for France came in at 48.6, above June's reading of 48.3 and expectations for a score of 48.0. The services index came in at 50.3, also above the 49.9 seen in June and expectations of 48.3.
Ahead in the economic calendar are manufacturing and services PMIs from Germany and the eurozone are due at 0830 BST and 0900 BST, respectively. In the London afternoon, the same for the US is at 1445 BST.
Elsewhere on the London Stock Exchange, supermarket chain J Sainsbury and Home Retail Group, the owner of high-street homewares retailer Argos, said the UK Competition & Markets Authority has unconditionally cleared the merger of the two companies following its Phase 1 investigation. Sainsbury's is buying Home Retail for GBP1.2 billion in a deal struck in April.
The two companies said the acquisition "remains subject to the satisfaction or waiver of the remaining conditions as set out in the scheme document including, amongst others, the approval of the acquisition by the Financial Conduct Authority and the approvals of the Home Retail Group shareholders".
Home Retail is holding a general meeting with shareholders on Wednesday. Sainsbury's added that the acquisition is expected to complete in early September. Sainsbury's shares were down 1.1%, while Home Retail was adding 3.2%.
In the FTSE 250, Acacia Mining was up 6.6% after saying revenue, earnings and pretax profit all soared in the first half of the year after selling more gold for a higher price and at a lower cost, but said it ultimately suffered a small net loss after tax.
Although pretax profit was significantly higher in the period, a USD107.7 million tax bill completely wiped that profit out and pushed Acacia to a net loss of USD6.1 million, swinging from a USD14.8 million profit a year earlier. The interim dividend was increased by 43% to 2.0 cents per share.
By Daniel Ruiz; danielruiz@alliancenews.com
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