UK markets were in buying mode this morning with the blue chip FTSE 100 index tacking on nine points (0.15 percent) to reach 5,777 by midday thanks to strong manufacturing data released by the Chinese government on Sunday.
The official figures from China revealed that the PMI index ticked up to 53.1 last month from 51 in February, marking the fourth monthly expansion of the manufacturing sector in a row.
Expectations were for a decline after the preliminary reading of the HSBC China PMI index came in at 48.1 last week, adding to concerns that growth in the world’s second largest economy is slowing at a faster pace than expected.
However, European manufacturing data released by Markit was far less positive, showing that industrial activity in Germany and France fell sharply in March.
Germany and France, currently the 18-member monetary union’s two largest economies, are the main contributors to bailout packages for struggling European countries.
“The manufacturing PMI data for Euro-area was uniformly bad for March,” said analyst at forex.com Kathleen Brooks.
“However, the PMI may not be telling the whole story. It is one of three main lead economic indicators for Germany along with the IFO and the ZEW and both of those indicators have been trending higher in recent months.”
On a positive note, the PMI index for the UK hit eight month highs at 52.1.
A separate report showed an increase in the unemployment rate in the euro zone to 10.8 percent in March from 10.7 percent in the previous month, which was in line with expectations.
Financial Times publisher Pearson (LON:PSON, up 2.5pct at 1,194p) topped the FTSE 100 leaderboard, followed by chipmaker ARM Holdings (LON:ARM, up 1.8pct at 602.5p) and beverage group SABMiller (LON:SAB, up 1.7pct at 2,553p).
Russian steelmaker Evraz (LON:EVR, up 1.7pct at 375.7p) also did well, driven by speculation that it could make a bid for Anglo American’s (LON:AAL, down 0.5pct at 2,324p) steel manufacturing business Scaw Metals.
Meanwhile, investors sold financial stocks including asset management firm Schroders (LON:SDR, down 1.8pct at 1,552p) and hedge fund manager Man Group (LON:EMG, down 1.7pct at 132.5p).
Other notable fallers including banks Barclays (LON:BARC, down 2.2pct at 2.2pct at 230.15p) and Lloyds (LON:LLOY, down 1.9pct at 32.98p).
US markets
US stocks were off to a negative start in New York this morning under pressure formt he lacklustre European updates.
The Dow Jones Industrial Average (DJIA) declined 31 points (0.25 percent) to 13,181 and the broader S&P 500 index fell one points (0.1 percent) to 1,407.
Traders in the US are looking to today’s US manufacturing index from the Institute for Supply Management (ISM), which will be released later this afternoon.
Broker Fairfax said that forecasts indicate that the index climbed to 53 from 52.4 in February. The figures are also expected to show that construction spending rose in February, the broker added.
UK corporate news
Back in the UK, today’s corporate news included contract wins by housebuilding and construction group Galliford Try (LON:GFRD, down 3.2pct at 605p) and waste management firm Shanks Group (LON:SKS, flat at 98.5p), both constituents of the FTSE 250 index.
Galliford has reached financial close on the £347 million Gateshead regeneration programme announced in April 2011.
The group’s consortium with Gateshead Council and housing association Home Group will now form a Local Asset Backed Vehicle to build 2,400 homes and associated community facilities, for both private sale and affordable housing.
Fellow midcap Shanks’ majority owned joint venture with SSE, 3SE has signed a 25 year contract worth in excess of £750 million with Barnsley, Doncaster and Rotherham for the treatment of black bag waste.
Under the agreement, SSE will use around half of the solid recovered fuel (SRF) produced at a new multi-fuel plant at Ferrybridge to generate electricity.
When the facility at Bolton Road is operational it will lead to a saving equivalent to 114,000 tonnes of CO2 every year, said Shanks.
Outside of the FTSE 350, Aminex (LON:AEX, up 20.5pct at 6.08p) and Solo Oil (LON:SOLO, up 5pct at 0.63p) confirmed that the Ntorya-1 well is now being drilled to a deeper target which may potentially contain liquid hydrocarbons.
This afternoon the partners said that it has secured the section of the well containing the gas discovery, between 2,660 metres and 2,685 metres. And drilling has now resumed.
The Carrol-6 rig will subsequently dismantled prior to well testing.