1st Sep 2015 07:33
LONDON (Alliance News) - London share prices opened lower Tuesday, with Inmarsat pushing higher after the successful orbit of the third satellite in its Global Xpress constellation, but with mining stocks dragging down the FTSE 100 down to earth.
The FTSE 100 was down 1.4% at 6,157.99, the FTSE 250 was off 1.1% at 16,911.55 and the AIM All-Share was down 0.2% at 729.63. In Europe, the CAC 40 in Paris was 1.4% lower, and the DAX 30 in Frankfurt was down 1.7%.
Inmarsat led the blue-chip gainers at the open, up 2.5%, after the satellite communications company confirmed the successful orbit of the third satellite in its Global Xpress constellation. The FTSE 100 company said the Inmarsat-5 F3 was launched from the Baikonur Cosmodrome in Kazakhstan on Friday and entered orbit on Monday morning.
Shares in Inmarsat already had added 3.5% on Friday after the successful launch of the satellite in Kazakhstan.
Meanwhile, mining stocks were weighing on the FTSE 100. BHP Billiton was down 2.3%, Anglo American, down 1.8% and Rio Tinto down 1.1%.
In the FTSE 250, St. Modwen Properties was the best performer after being upgraded to Overweight from Neutral by JP Morgan, according to traders.
Investors will focus Tuesday on the release of Markit manufacturing PMIs for Germany, the eurozone and the UK, expected at 0855 BST, 0900 BST and 0930 BST, respectively.
CMC Markets analyst Michael Hewson said the UK manufacturing sector has been showing signs of weakness in the third quarter despite last week?s final second quarter UK Gross Domestic Product numbers showing a sharp rise in business investment.
"North Sea oil has been showing an improvement in recent months, and the hope is that after a slow start to the third quarter we could see a pickup in August manufacturing PMI from July?s 51.9 to 52.0," Hewson added.
In Asia on Tuesday, the Japanese Nikkei 225 closed down 3.8%. In China, the Hang Seng trades down 0.8% and the Shanghai Composite is down 2.1%.
The manufacturing sector in China contracted at a faster rate in August, the latest survey from Caixin revealed on Tuesday, as its PMI hit a six-year low reading of 47.3.
That's higher than last month's flash estimate of 47.1, but it's down sharply from 47.8 in July. It also moves further beneath the line of 50 that separates expansion from contraction. Caixin also said its services PMI sank to 51.5 from 53.8 in July, while its composite index fell to 48.8 from 50.2.
Wall Street ended lower Monday, in the wake of US Federal Reserve Vice Chairman Stanley Fischer's comments at the Jackson Hole symposium in Wyoming. On Saturday, the Fischer left the door open to a US interest rate hike in September, at a time when most analysts had started to believe that a change in the US monetary policy would be delayed until later in the year, as a consequence of concerns about economic growth in China.
Fischer said the Fed should not wait until US inflation reaches its 2% goal to begin increasing rates. He added that here were good indications that inflation would rise. He also said US central bankers were looking at the international situation, particularly developments in China, as they consider their next move.
"We need to consider the overall state of the US economy as well as the influence of foreign economies on the US economy as we reach our judgement on whether and how to change monetary policy," he said.
The DJIA closed Monday down 0.7%, the S&P 500 ended down 0.8% and the Nasdaq Composite finished down 1.1%.
Also in Tuesday's economic calendar, UK mortgage approvals are due at 0930 BST. In the US, the Redbook index is due at 1355 BST, while the Markit manufacturing PMI for the US is due at 1445 BST. The US ISM manufacturing PMI and US construction spending are both due at 1500 BST.
By Daniel Ruiz; [email protected]
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