2nd Mar 2015 10:41
LONDON (Alliance News) - The FTSE 100 is trading higher mid-morning Monday reaching a new intraday record high and nearing the 7,000 mark as the UK manufacturing Purchasing Managers' Index came in ahead of expectations.
The FTSE 100 is up 0.3% at 6,969.40, having touched a new record intraday high of 6,974.26. The FTSE 250 is trading up 0.3% at 17,318.47, also reaching a new record high of 17,335.01. The AIM All-Share is flat at 714.46.
European stocks are mixed with the CAC 40 in Paris down 0.2% and the DAX 30 in Frankfurt up 0.3% after differing fortunes in their respective manufacturing sectors.
The headline manufacturing Markit PMI for France fell notably to 47.6 in February from 49.2 in January, versus the flash score was 47.7. Germany's PMI rose to 51.1 in February from 50.9 in January. The rate of improvement was above the flash score of 50.9. The eurozone as a whole scored a final PMI reading of 51.0, unchanged from January's six-month high. The reading was below the flash score of 51.1.
The UK's manufacturing sector grew at a faster than expected rate. The Markit PMI for February came in at 54.1, above the consensus of 53.4 and January's revised reading of 53.1, previously 53.0.
"Scratching beneath the surface and we see a lopsided upturn, with the prime driver being a strong upsurge in new orders and production at consumer goods producers while a near-stalling of demand for plant and machinery points to ongoing weak business investment," says Rob Dobson, senior economist at Markit.
Eurozone inflation remained negative for the third straight month in February but the rate of decline in prices slowed more than expected, flash estimate from Eurostat revealed. The harmonized index of consumer prices fell 0.3% from last year, slower than January's 0.6% decline and the expected decrease of 0.5%.
Meanwhile, the unemployment rate in the region also improved by more than expected. The rate fell to 11.2% in January down from the revised 11.3% in December. Economists had expected the figure to remain unchanged from the previous December reading of 11.4%.
The People's Bank Of China on Saturday said it has cut its one-year lending rate by 0.25 percentage point to 5.35%. The Chinese central bank also reduced deposit rates by 0.25 percentage points to 2.5%. The cut in rates came into effect on Sunday.
The bank has made the rate cut in order to stimulate the world's second-largest economy amid concerns of slowing economic growth. The country is facing a weakening property market, a higher proportion of investment being sent offshore and a growing risk of falling prices.
Intertek Group is the biggest gainer in the FTSE 100, up 4.6% despite reporting lower profits for 2014, as the strength of the pound and weakness in its oil and gas business that's expected to continue into this year offset growth in its consumer products business.
However, the quality and safety testing company raised its full-year dividend to 49.1 pence, up from 46.0p in 2013 and Chief Executive Wolfhart Hauser said he expects the near-term negative headwinds in its oil and gas capex business to ease.
Struggling oil explorer Afren said it has secured a further deferral on payments owed to its lenders and said it remains in talks with its bondholders and potential third party financiers to secure its financial position. The company leads the FTSE 250 gainers, up 20%.
Oxford Instruments is another strong gainer in the FTSE 250, up 4.4%. The maker of tools and systems for industry and research said it has agreed with its bank lenders to increase its revolving credit facility and extend its term for nearly two years, also increasing the net debt to earnings ratio covenant on the facility for a year.
Amlin, down 4.1%, is the biggest faller in the FTSE 250. The insurer reported a drop in pretax profit in 2014 amid pressure on investment returns and a lower underwriting result. Nevertheless, Amlin said it would increase its ordinary dividend for the year by 3.8% to 27.0 pence per share, while also moving to declare a special dividend of 15.0 pence per share, citing confidence in its capital position.
Ultra Electronics, down 2.9%, is also a big mid-cap faller. The company posted a massive fall in pretax profit for 2014, hit by the early termination of a contract in Oman, though the group said that excluding the impact of the Oman contract, its results were broadly in line with its expectations. Its statutory pretax profit fell to GBP21.5 million from GBP49.3 million last year. Excluding the termination of its Oman Airport IT contract, pretax profit rose to GBP68.4 million against GBP45.1 million.
Still ahead in the economic calendar are US Markit and ISM manufacturing PMI at 1445 GMT and 1500 GMT respectively.
Wall Street is indicated to open higher. The DJIA and Nasdaq 100 are pointed up 0.2%, while the S&P 500 is indicated up 0.1%.
By Neil Thakrar; [email protected]; @NeilThakrar1
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