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Lacklustre CIPS data holds City close to opening mark
The FTSE 100 Index clung to its opening mark yesterday as progress was held back by poor corporate news flow and disappointing figures from the key services sector.
Low trading volumes also added to lacklustre trading on the Footsie, while there was no guidance from Wall Street as US markets were closed for the Independence Day holiday.
The FTSE 100 closed up 2.01 points at 4236.28 after more economic gloom in the UK.
The Chartered Institute of Purchasing and Supply posted an activity index of 51.6 from the services sector – down from the previous month's 51.7 when the sector notched its first month of growth since April last year.
"The sideways movement in the headline business activity index in part reflects some consolidation," said Paul Smith, senior economist at Markit.
"Nonetheless, the underlying data indicate that the business climate remains fragile with tight lending conditions and rising unemployment remaining key threats to continued service sector recovery."
There was little market reaction to the figures with investors convinced the Bank of England will keep interest rates at record lows for some months to come.
But London's blue-chip index at least stemmed the losses seen in the previous session after grim US unemployment data caused shares worldwide to slide on Thursday afternoon, with the FTSE 100 down more than 2 per cent.
The worries over global economic growth were again reflected in trading for mining shares, with Kazakhmys down 16p to 630p, Xstrata falling 95/8p to 6543/4p and Vedanta Resources off 19p to 1369p.
Insurer Friends Provident led the fallers' board, down 7 per cent, or 45/8p, to 631/2p, as shares adjusted for the disposal of its majority stake in F&C Asset Management to its shareholders. The move will allow Friends to focus on the task of reviving its core business.
British Airways attracted interest late in the session as the under-pressure company posted traffic figures for June and announced more cost cutting and plans to shed around 3,700 jobs this financial year.
Despite revealing that it carried 2.93 million passengers last month – 4.9 per cent fewer than in June 2008 – shares held on to gains seen earlier after Nomura started coverage of the carrier at neutral.
The stock closed ahead by 61/2p to 1251/2p.
Another leading Footsie riser was publishing and media group Reed Elsevier, which gained 171/4p to 4571/4p, or 4 per cent, after Credit Suisse brokers upped the European media sector to overweight.
Banks also featured on the risers board in a decent finish to the week, with Barclays ahead 8p to 297p, HSBC 83/4p stronger at 509p and Lloyds Banking Group up 15/8p to 671/2p. Royal Bank of Scotland joined the hunt with shares up 7/8p to 383/4p.
But Balfour Beatty shares were 73/4p lower to 3001/2p, even though the construction firm said that it had been trading in line with expectations.
In the FTSE 250, transport group Arriva lost 181/4p to 3863/4p despite a buy recommendation from Nomura.
Other stocks favoured by the firm in the sector, Stagecoach and Go-Ahead, rose by a penny to 1271/2p and 11p to 1179p respectively.
The biggest Footsie risers of the session were British Airways, Reed Elsevier, Barclays and Lloyds Banking Group.
The biggest Footsie fallers were Friends Provident, Land Securities fell 18p to 4431/2p, Old Mutual lost 27/8p to 825/8p and Fresnillo slipped 131/2p to 5001/2p.
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Weather for Yorkshire
Thursday 24 May 2012
Today
Sunny spells
Temperature: 10 C to 25 C
Wind Speed: 12 mph
Wind direction: North east
Tomorrow
Sunny
Temperature: 9 C to 21 C
Wind Speed: 16 mph
Wind direction: East
