LONDON MARKET MIDDAY: Weak EU PMI Readings Likely To Make ECB Cautious

LONDON (Alliance News) - The FTSE 100 was underperforming European equity index peers at midday on Thursday, as losses for Reckitt Benckiser and Vodafone prevented the UK index from reversing early losses the same way that France's and Germany's benchmarks had.The FTSE 100 was down 8.05 points, or 0.1%, at 6,834.83 at midday. The FTSE 250 was 43.82 points higher, or 0.2%, at 18,626.68, and the AIM All-Share was up 0.8% at 914.06.The Cboe UK 100 was down 0.2% at 11,605.80, while the Cboe UK 250 was up 0.1% at 16,654.05 and the Cboe UK Small Companies up 0.4% at 11,167.87.In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were up 0.8% and 0.7% respectively at midday. Both indices had traded around 0.2% lower in opening trade, but rebounded from these losses as the morning progressed.Still to come is the latest monetary policy decision from the European Central Bank at 1245 GMT, followed by a press conference with ECB President Mario Draghi at 1330 GMT.Analysts believe the ECB will strike a more cautious tone at this month's meeting given recent soft data and worries over a slowdown in global economic growth. Thursday's private sector data for the eurozone are unlikely to ease these concerns.IHS Markit showed the eurozone's private sector expanded at the weakest pace in five-and-a-half years at the start of the year, led by weaker pace of growth in both manufacturing and services, defying expectations for further improvement.The flash composite Purchasing Managers' Index dropped to a 66-month low of 50.7 from 51.1 in December, remaining just above the mark of 50 which separates expansion from contraction. Economists had forecast the reading to edge up to 51.4.The flash manufacturing PMI fell to a 50-month low of 50.5 from 51.4 in December, which was much weaker than the 51.3 reading economists had predicted. The flash services PMI eased to a 65-month low of 50.8 in January from 51.2 in December, again below expectations for a rise to 51.5."The disappointing survey data indicate that GDP is rising at a quarterly rate of just 0.1%," IHS Markit Chief Business Economist Chris Williamson said."Companies are concerned about a wider economic slowdown gathering momentum, with rising political and economic uncertainty increasingly affecting risk appetite and demand," Williamson added.The euro was quoted at USD1.1342 at midday, down from USD1.1388 late Wednesday.Oanda senior market analyst Craig Erlam commented: "The ECB is widely expected to push back expectations for its first post-crisis era rate hike, which was initially being eyed for the end of the summer. They may hold off on this today though, instead waiting until March when they have new economic projections on which to base it on.""That's not to say that Draghi won't hint that such a move is likely, with the new projections likely being revised lower based on the numbers we're already seeing," he added.Stocks are pointed to a marginally higher open in the US on Thursday, with both the Dow Jones and S&P 500 called up 0.1% while the Nasdaq Composite is seen 0.4% higher.In London at midday, St James's Place rose to the top of the FTSE 100, shares up 3.1% after the wealth manager posted a robust set of annual results despite a soft fourth quarter. The blue-chip firm expects funds under management to have increased by 5.3% to GBP95.55 billion as of December 31 from GBP90.75 billion the year before. Net inflow of funds under management increased 8.1% to GBP10.28 billion from GBP9.51 billion in 2017, as St James's recorded an increase of 7.5% in gross inflows of GBP15.70 billion from GBP14.70 billion."Against the particularly difficult market conditions that prevailed in the final quarter and compared to an exceptional outcome in 2017, I am pleased to report another good set of results that demonstrate the resilience of our business," said Chief Executive Andrew Croft.Croft added that whilst the final quarter of the year began strongly, inflows weakened in November and December, resulting in gross inflows for the fourth quarter of GBP3.95 billion which he described as "robust" though "slightly lower" than what was achieved in the same period a year ago.Capping any possible upside for the FTSE 100 was Reckitt Benckiser, down 3.2%. Jefferies downgraded its rating on the Nurofen painkiller maker to Underperform from Hold.Vodafone also was among the morning session's losers, down 2.6%, which AJ Bell investment director Russ Mould said indicates investors may have "low expectations" for its third-quarter results on Friday.Metro Bank was sat atop the FTSE 250, up 4.5% as the challenger bank got some respite following Wednesday's 39% rout of its shares.Outsourcer Capita was up 4.4% after winning a payments technology contract lasting three years with Luxon Payments.Luxon is creating a new online and mobile gaming e-wallet. Capita's payment technology Pay360 and fraud protection offering Optimise will provide protection, Capita said. Capita did not say how much the contract is worth. Takeaway platform Just Eat rose 3.6% after JPMorgan upgraded its rating on the stock to Overweight from Neutral.Games Workshop shares shed 3.9% as the miniature wargaming firm went ex-dividend, meaning new buyers no longer qualify for the latest payout. Restaurant Group was down 2.6% after the dining chain reported a dip in annual like-for-like sales in what it described as a "pivotal" year.For 2018, the pub and restaurant owner and operator reported like-for-like sales down 2.0%. Total sales however, including one week of trading from recently acquired Wagamama, were up 1.0%.Restaurant Group, which owns dining brands such as Frankie & Benny's, Chiquito, and Garfunkel's, acquired pan-Asian restaurant chain Wagamama last November in a GBP357 million deal, and closed the acquisition in December.On London's junior AIM market, shares in Fevertree Drinks climbed 13% as the premium carbonated mixers firm said its results for 2018 are expected "comfortably" above board forecasts.For 2018, the tonic water maker expects revenue of GBP236 million, up 39% from GBP170.2 million last year due to a "strong" UK sales performance, with revenue in the region up 52%, driven by an "outstanding summer trading period"."The relationship with Southern Glazer's Wine & Spirits continues to develop well, and the group is confident that the exclusive on trade agreement signed with them in the second half, alongside the positive progress seen in the off-trade, provides an excellent platform for further growth in 2019," said Fevertree.