1st Sep 2014 16:15
LONDON (Alliance News) - The FTSE 100 ended marginally higher Monday after a late rally, having traded down for most of the day on the back of weak economic data and concerns over the crisis in Ukraine.
At the end of slow day of trade because of the US Labor Day holiday, the FTSE 100 closed up 0.1% at 6,825.31. The AIM All-share ended down 0.2% at 779.07, while the FTSE 250 outperfomed the other indexes, gaining 0.5% to 15,957.13.
European stocks also recovered from the morning's PMI data, with the French CAC 40 ending flat and the German DAX up 0.1%.
Disappointing PMI figures from China, Europe and the UK had set the tone for most of the day.
August manufacturing PMI readings for eurozone countries came in largely below expectations, highlighting the weakness of the recovery in the region. The PMI for the eurozone as a whole was 50.7, below the consensus of 50.8 and July's figure of 51.8. The reading for Europe's top economy, Germany, also was lower than expected at 51.4, missing the forecast of 52.0. The second reading of German second-quarter GDP confirmed the first reading, a quarter-on quarter contraction of 0.2%.
UK PMI results for August were equally disappointing, coming in at 52.5, missing the consensus of 55.0 and down from 54.8.
"Russia’s escalation of the conflict in Ukraine has taken a toll on the internationally exposed manufacturing sector, and that effect could yet worsen further in the coming months given recent confidence drops in the more directly exposed core European economies. These developments pose a serious downside risk to growth this year and next," said Berenberg Chief Economist Rob Wood.
NATO Secretary General Anders Fogh Rasmussen on Monday decried Russian involvement in eastern Ukraine, and said that NATO will boost it presence in eastern alliance member states.
"Russian forces are engaged in direct military operations inside Ukraine," Rasmussen said during a press conference. "This is a blatant violation of Ukraine's sovereignty and territorial integrity."
At a summit later this week, NATO will discuss a regional response to the escalating crisis. Rasmussen said that the alliance will develop a "spearhead" force that can respond rapidly to threats at short notice.
Tesco was again amongst the heaviest FTSE 100 fallers, at the start of new Chief Executive Dave Lewis' reign. Major shareholder David Herro told the Sunday Telegraph he has cut his investment to 1% from around 3% due to the absence of a clear strategy. The company's shares ended down 1.7%.
Perform Group finished comfortably on top of the FTSE 250, its shares rising 26%. The digital media company urged its shareholders to take no action after the US's Access Industries Group made a final cash offer to acquire all of the shares in the company it does not already own for 260 pence per share, valuing Perform at GBP701.6 million. Perform reiterated its confidence in its standalone strategy and growth prospects, and said it remains focussed on "delivering significant value for all shareholders".
Dixons Carphone was the third highest riser of the mid-chip index after it said that it has agreed a long term deal with Vodafone Group for an enhanced distribution partnership. Shares in Dixons Carphone ended up 4.7% while Vodafone ended Monday flat.
In the economic calendar for Tuesday, UK construction PMI for August will be released at 0930 BST while later in the day the focus will turn a range of US data, the highlight being the ISM manufacturing PMI for August at 1500 BST.
In the corporate calendar, FTSE 250-listed Redrow will be reporting full-year results.
By Neil Thakrar; [email protected]
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