London open: FTSE slips into red despite positive start

- FTSE initially opens higher before dropping into red- RBS to avoid 'good/bad' bank break-up- AT&T planning to take stake in Vodafone, reports claimtechMARK 2,654.18 -0.29%FTSE 100 6,731.31 -0.00%FTSE 250 15,449.06 -0.20%The FTSE inched higher in early trading, but was soon down in the red, as investors digested losses seen in the US overnight coupled with a mixed performance on Asian markets. October Chinese factory activity gave investors some cause for concern because although it climbed from 51.1 to 51.4 month-on-month, there was in fact a significant gap between big and small manufacturers, with the smaller companies actually experiencing a contraction in the four-week period. Zhao Qinghe, a spokesman for China's National Bureau of Statistics, said: "Although the PMI rose in October for the fourth consecutive month, the momentum driving the increase is unbalanced."In Japan, shares in Sony plunged after the group issued a profit warning, saying it now expects full-year profit to be a whoppin 40% lower than previously expected, and posted a loss for the quarter to the end of September. Back in the UK, today's focus will be on the purchasing managers' index (PMI) for manufacturing, which is tipped to drop slightly to 56.4 in October from 56.7 in September.Also making headlines today will be Royal Bank of Scotland, which has said it will not split into 'good' and 'bad' banks, as it reported a 14% fall in core operating profit to 1.28bn in the third quarter. The 81% state-owned bank will instead create an internal 'bad bank' where it will shelve off £38bn of its toxic assets.Over in Germany, the government slammed "incomprehensible" criticism from the US Treasury, which said its export-led growth model was damaging growth for the Eurozone as well as the wide global recovery. In other noteworthy news, the founder of Dunelm, the homewares retailer, has been unveiled as a major shareholder in Marks & Spencer. Bill Adderley is the company's biggest private investor with a 3% stake, market filings have revealed. US posts biggest October gain for three years In the US, although stocks finished broadly lower they were actually up for the month as a whole, posting the biggest gains for that month in three years. The Chicago NAPM´s purchasing managers´ index for the month of October surged to 65.9, which beat estimates for a reading of 54.5. Some market commentary was also referencing the approaching mid-December deadline on Capitol Hill for Congressmen to thrash out a medium-term proposal on fixing the country´s finances. In today's data, the US Institute for Supply Management's (ISM) manufacturing index is expected to fall to 55.1 in October from 56.2 a month earlier. A reading above 50 signals expansion.Later in the day, Federal Reserve officials will speak after the central bank this week announced it was keeping its monetary policy unchanged. The Fed on Wednesday said it would maintain its monthly $85bn bond buying programme and keep its interest rate at 0.25%.Meanwhile, some spying by the US National Security Agency went too far, the US Secretary of State John Kerry has conceded. He assured listeners that he would work together with President Obama to ensure no further inappropriate spying took place. The issue has caused considerable tension between the US and its European allies. Meggitt leads the downsideMeggitt had a double dose of bad news for investors as it told them trading had been "slightly" below expectations and a supply hiccup could cost 20m pounds. The FTSE 100 aerospace and defence manufacturer warned it now expected 2013 revenue growth rates to be in the "low single digits". It had given guidance of mid single digit revenue growth for the full year at its interims in August.RBS was also lower after it reported, in addition to the above news, that non-core operating losses widened to £845m from £586m a year earlier due to exit and restructuring costs as the bank prepares to return to privatisation. Meanwhile, Vodafone shares jumped on reports that AT&T is planning to invest in the telecoms giant in early 2014. BAE shares were also higher, following yesterday's news that it has scored a £429m deal, under which it will supply howitzers to the US Army. Whitbread shares were on the rise; Deutsche Bank this morning reiterated its 'hold' rating and 3,485p price target on the stock. FTSE 100 - RisersVodafone Group (VOD) 229.25p +2.12%Shire Plc (SHP) 2,779.00p +1.02%BT Group (BT.A) 380.10p +0.82%HSBC Holdings (HSBA) 686.90p +0.70%BG Group (BG.) 1,282.00p +0.67%Royal Dutch Shell 'B' (RDSB) 2,172.50p +0.60%Kingfisher (KGF) 379.70p +0.58%Severn Trent (SVT) 1,867.00p +0.54%Centrica (CNA) 355.20p +0.51%Vedanta Resources (VED) 1,068.00p +0.47%FTSE 100 - FallersMeggitt (MGGT) 525.00p -8.30%Royal Bank of Scotland Group (RBS) 357.60p -2.72%easyJet (EZJ) 1,287.00p -1.68%Aggreko (AGK) 1,584.00p -1.61%Wolseley (WOS) 3,315.00p -1.37%Croda International (CRDA) 2,403.00p -1.35%Unilever (ULVR) 2,492.00p -1.31%Barclays (BARC) 260.20p -1.29%Experian (EXPN) 1,256.00p -1.10%Travis Perkins (TPK) 1,836.00p -1.08%FTSE 250 - RisersRank Group (RNK) 148.70p +3.62%IP Group (IPO) 152.00p +3.40%AL Noor Hospitals Group (ANH) 867.00p +2.00%Direct Line Insurance Group (DLG) 228.50p +1.56%Rentokil Initial (RTO) 105.90p +1.34%Henderson Group (HGG) 217.00p +1.21%Partnership Assurance Group (PA.) 412.70p +1.15%Berendsen (BRSN) 981.00p +1.08%African Barrick Gold (ABG) 194.50p +1.04%Hiscox Ltd (HSX) 667.50p +0.91%FTSE 250 - FallersGenus (GNS) 1,288.00p -2.42%Domino Printing Sciences (DNO) 677.50p -2.02%Kenmare Resources (KMR) 20.00p -1.72%Spirent Communications (SPT) 109.00p -1.71%Diploma (DPLM) 681.50p -1.66%Go-Ahead Group (GOG) 1,655.00p -1.61%Chemring Group (CHG) 214.10p -1.56%Cobham (COB) 283.70p -1.56%Bwin.party Digital Entertainment (BPTY) 120.90p -1.55%AZ Electronic Materials SA (DI) (AZEM) 283.20p -1.50%FTSE TechMARK - RisersPuricore (PURI) 51.00p +10.87%Oxford Biomedica (OXB) 2.75p +0.92%SDL (SDL) 254.25p +0.89%Innovation Group (TIG) 32.00p +0.79%NCC Group (NCC) 165.00p +0.61%Anite (AIE) 90.75p +0.55%E2V Technologies (E2V) 144.75p +0.52%Vectura Group (VEC) 110.50p +0.45%Ricardo (RCDO) 611.00p +0.08%IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 179.91 +0.07%FTSE TechMARK - FallersConsort Medical (CSRT) 882.50p -1.06%Torotrak (TRK) 27.00p -0.92%Wolfson Microelectronics (WLF) 139.69p -0.58%Kofax (KFX) 378.00p -0.26%NR