London close: Stocks finish higher after slew of PMI data

(Sharecast News) - London's stock markets ended Monday on a positive note, as investors pored over a number of economic activity reports from both the UK and international markets.

The FTSE 100 index gained 0.36% to close at 8,259.71 points, while the FTSE 250 edged up 0.06%, finishing the day at 20,845.12 points.

In currency markets, sterling was last up 0.2% on the dollar to trade at $1.3348, as it increased 0.52% against the euro, changing hands at €1.1996.

"UK services activity growth slowing more than expected and a contracting euro area private sector activity weighed on stocks," said IG analyst Axel Rudolph.

"Despite this most indices ended the day in positive territory.

"Earlier in the day, markets in Asia benefitted from an unexpected 14-day reverse repo 10 basis point cut by the People's Bank of China, which improved sentiment."

Rudolph noted that gold prices were on track for a third straight day of gains, continuing their "steep ascent" towards the $2,650 per troy ounce mark.

"Due to heightened tensions between Israel and Lebanon the oil price also remains bid.

"The focus for Tuesday will be on the Reserve Bank of Australia's interest rate decision, Germany's Ifo business climate and US consumer confidence."

UK business activity grows more slowly, eurozone activity contracts

In economic news, private business activity in the UK was expanding at a slower pace than expected.

According to S&P Global, the composite purchasing managers' index (PMI) declined to 52.9 in September from 53.8 in August, marking the 11th consecutive month of growth.

However, the slowdown was evident in both the manufacturing and services sectors, which fell to three-month and two-month lows, respectively.

While businesses reported increased customer demand and improved domestic conditions, concerns over fragile client confidence and ongoing inventory reductions tempered growth.

Employment growth in the private sector also decelerated, with service industries showing minimal staffing increases and manufacturers implementing job cuts.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said the data hinted at a "soft landing" for the UK economy.

"A slight cooling of output growth across manufacturing and services in September should not be seen as too concerning, as the survey data are still consistent with the economy growing at a rate approaching 0.3% in the third quarter, which is in line with the Bank of England's forecast," he said.

Contrasting the UK's modest expansion, the eurozone experienced its first economic contraction in seven months.

Preliminary estimates from S&P Global and Hamburg Commercial Bank (HCOB) indicated that the composite PMI dropped to 48.9 in September, down from 51.0 in August and below the critical 50-point threshold separating expansion from contraction.

The decline was primarily driven by a sustained downturn in the manufacturing sector, which fell to 44.8 from 45.8.

Germany's manufacturing sector was notably affected, with its PMI sliding to a 12-month low of 40.3.

Meanwhile, the eurozone's services sector saw a slight reduction in momentum, falling to a seven-month low of 50.5.

"With new orders and volumes of outstanding business falling at sharper rates and business confidence at a ten-month low, companies scaled back their workforce numbers for the second month running," the survey read.

"Meanwhile, demand weakness resulted in slower inflation of both input costs and output prices."

Across the Atlantic, the US private sector's expansion moderated slightly in September, as the S&P Global composite PMI edged down to 54.4 from 54.6 in August, aligning closely with forecasts.

The services sector remained robust, with the PMI holding steady above expectations at 55.4.

However, the manufacturing sector faced its steepest decline in 15 months, with the PMI dropping to 47 from 47.9, marking the third consecutive month below the expansion threshold and the lowest level since June 2023.

"A moderation of order book growth and a deterioration in business expectations for the year ahead to a near two-year low meanwhile reflected heightened uncertainty ahead of the Presidential Election," the survey said.

"Companies consequently held back on hiring and allowed employment to fall for a second successive month."

Earlier in the global day, the People's Bank of China (PBoC) took steps to ensure liquidity in the banking system by injecting around CNY 234.6bn (£25.05bn).

It was the first such infusion in months, and involved lowering the 14-day reverse repurchase rate.

Analysts viewed this move as routine, rather than a change in policy, as it appeared aimed at maintaining adequate liquidity ahead of the upcoming National Day holidays.

Rightmove rises on third takeover bid, Alphawave IP tumbles

On London's equity markets, Rightmove shares increased 0.77% following the company's announcement to respond to a third takeover bid from Rupert Murdoch's REA Group.

The latest offer valued Rightmove at £6.1bn, with REA proposing 770p per share, surpassing the initial 705p per share offer made earlier in the month and a second offer rebuffed last week.

Retailers in general performed well, with Marks and Spencer Group up 1.76%, B&Q owner Kingfisher rising 1.61%, Primark parent Associated British Foods gaining 1.13%, and Next increasing by 1.24%.

The gains were largely driven by positive remarks on the sector from UBS.

Electrical retailer Currys jumped 8.04% after Berenberg raised its price target for the stock from 92p to 125p.

The investment bank cited confidence in Currys' growth outlook and improving cash generation as key factors for the upward revision.

On the downside, B&M European Value Retail fell 2.57% after UBS initiated coverage with a 'sell' rating.

Alphawave IP Group saw a sharp decline of 13.76% after reporting a loss in the first half of the year and a halving of revenues, attributing the downturn to a strategic shift in business mix and delays in customer programs.

Pharmaceutical giant AstraZeneca dropped 1.27% after announcing that a key trial for a breast cancer treatment did not improve overall survival rates.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,259.71 0.36% FTSE 250 (MCX) 20,845.12 0.06% techMARK (TASX) 4,796.81 0.10%

FTSE 100 - Risers

Antofagasta (ANTO) 1,825.00p 2.10% Prudential (PRU) 638.60p 1.85% Marks & Spencer Group (MKS) 376.00p 1.76% Associated British Foods (ABF) 2,276.00p 1.74% Experian (EXPN) 3,874.00p 1.63% Glencore (GLEN) 384.85p 1.62% Kingfisher (KGF) 328.00p 1.61% HSBC Holdings (HSBA) 670.70p 1.54% Haleon (HLN) 395.40p 1.54% Fresnillo (FRES) 595.50p 1.53%

FTSE 100 - Fallers

Smurfit Westrock (DI) (SWR) 3,470.00p -2.64% B&M European Value Retail S.A. (DI) (BME) 410.10p -2.57% Smith (DS) (SMDS) 457.00p -2.43% AstraZeneca (AZN) 11,584.00p -1.66% Barclays (BARC) 223.20p -1.57% Hikma Pharmaceuticals (HIK) 1,873.00p -1.52% Halma (HLMA) 2,568.00p -1.42% International Consolidated Airlines Group SA (CDI) (IAG) 204.40p -1.40% Rentokil Initial (RTO) 360.00p -1.32% easyJet (EZJ) 512.80p -1.23%

FTSE 250 - Risers

Currys (CURY) 84.70p 8.04% Baltic Classifieds Group (BCG) 295.00p 4.06% IntegraFin Holding (IHP) 372.50p 3.62% Auction Technology Group (ATG) 417.00p 3.35% Endeavour Mining (EDV) 1,865.00p 2.47% Centamin (DI) (CEY) 156.90p 2.15% WH Smith (SMWH) 1,429.00p 2.07% Domino's Pizza Group (DOM) 295.00p 2.01% Dunelm Group (DNLM) 1,235.00p 1.90% SDCL Energy Efficiency Income Trust (SEIT) 64.90p 1.88%

FTSE 250 - Fallers

Close Brothers Group (CBG) 404.20p -6.22% Ithaca Energy (ITH) 102.00p -3.95% NCC Group (NCC) 170.80p -3.72% Indivior (INDV) 680.00p -3.55% Hays (HAS) 90.90p -3.09% Great Portland Estates (GPE) 360.50p -2.96% Bridgepoint Group (Reg S) (BPT) 329.80p -2.89% W.A.G Payment Solutions (WPS) 81.80p -2.62% Renewi (RWI) 622.00p -2.51% SThree (STEM) 395.50p -2.47%