1st Oct 2015 07:34
LONDON (Alliance News) - UK equities have started the fourth quarter just as they ended the third, posting strong gains at the open Thursday, with investors looking ahead to purchasing managers' index readings from Europe, the UK and the US.
The FTSE 100 index traded up 1.4% at 6,147.09 points, the FTSE 250 was up 1.1% at 16,874.86 and the AIM All-Share traded up 0.1% at 726.04.
In Europe, the French CAC 40 index was up 1.2% and the German DAX 30 was up 0.9%.
There are a raft of Markit manufacturing PMI readings still to come, with France at 0850 BST, Germany at 0855 BST, the eurozone at 0900 BST the UK at 0930 BST and the US at 1445 BST. There is also the US Institute for Supply Management manufacturing PMI at 1500 BST, alongside US construction spending.
PMI's have already come in from China and Japan overnight. The latest report from the National Bureau of Statistics showed that the manufacturing sector in China continued to contract in September, albeit barely, with a purchasing managers' index score of 49.8. That beat forecasts for a reading of 49.7, which would have been unchanged from the August reading - although it remains just barely beneath the boom-or-bust line of 50 that separates expansion from contraction.
Non-manufacturing PMI released by China Federation of Logistics and Purchasing based on a survey of about 1,200 companies came in at 53.4 for September, unchanged from August.
A separate report from Caixin also showed that China's manufacturing sector continued to contract in September, with a final manufacturing PMI score of 47.2. That beat expectations for 47.0, which would have been unchanged from last month's preliminary reading, although it remains at a six-and-a-half year low.
In Japan, the Nikkei manufacturing PMI showed growth in the Japanese manufacturing sector slowed in September. The PMI reading for the month came in at 51.0 from 51.7 in August but was slightly ahead of the 50.9 preliminary reading last month. Nikkei said that production increased at the weakest rate in the current five-month period of expansion, while overseas orders declined at the fasted rate in over two years.
Nevertheless, the Japanese Nikkei 225 index closed 1.9% higher, while the Hong Kong and Shanghai markets were closed for Chinese National Day.
On the corporate front in the UK, miners continued to lead the rebound, with Glencore regaining almost all the losses it incurred on Monday. The stock was up 2.5% at the open, building on strong performances on Tuesday and Wednesday after falling 29% on Monday. Glencore was joined by other miners at the top of the gainers list, with Rio Tinto up 2.0% and Anglo American up 1.8%.
In the FTSE 250, Tullow Oil was the best performer up 10%. The oil and gas company said its banks have completed their reserve-based lend redetermination process and said its financing arrangement remain the same as a result.
Tullow said is available debt capacity remains at USD3.7 billion. At the end of September, the company had cash and undrawn credit facilities totalling USD2.1 billion with headrooms and no near-term maturities.
Numis also has added Tullow to its list of Top Picks, according to traders.
Alliance Trust traded up 3.8% after the FTSE 250-listed investment trust announced a series of sweeping changes to its investment strategy, dividend policy and board, changes which come in the wake of the sustained public spat between the company and activist investor Elliott Advisors.
The trust said it will change its investment mandate to focus on global equities and will dispose of non-core investments. It will also award its investment mandate to Alliance Trust Investments at a fee rate of 35 basis points on average net asset value, which it said is among the lowest in the industry. It will also introduce the MSCI All Country World Index as a formal benchmark for its performance.
Elsewhere, shares in Intelligent Energy Holdings surged 14% after it struck a deal to acquire the energy management business of GTL, which provides energy to telecommunications towers in India, as it said trading had accelerated in the second half of its financial year.
The energy technology company said the acquisition of the business, for around GBP85 million, will strengthen is Distributed Power and Energy division and will provide the company with a customer base to which it can start rolling out its fuel-cell technology. Intelligent Energy said the deal provides a major platform for fuel cells to be deployed as a distributed power service.
By Neil Thakrar; [email protected]; @NeilThakrar1
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