London close: FTSE closes lower as risk-off takes hold once more, UK data dissapoints

Mon 04 Sep 2017

LONDON (SHARECAST) - (ShareCast News) - London stocks remained weaker at the close amid worries about North Korea's bomb test over the weekend and following the release of disappointing UK construction sector data, but losses were capped by a strong performance from precious metals miners and thanks to a softer pound.
The FTSE 100 was down 0.36% to 7,411.47, with precious metals miners Randgold and Fresnillo helping to limit the downside as gold prices rallied to an 11-month high.

Korean worries also weighed on European markets with the DAX closing 0.33% lower to 12,102.21, the CAC 40 down 0.38% to 5,103.97 and the IBEX 35 0.80% lower at 10,243.20.

Meanwhile, a weaker pound also lent some support, with the currency trading down 0.55% against the euro to 1.0861 and 0.07% versus the dollar at 1.2944.

Data released mid-morning showed activity in the UK construction sector unexpectedly declined in August to its lowest level in a year. The IHS Markit/CIPS construction purchasing managers' index fell to 51.1 from 51.9 the month before, below expectations for an uptick to 52.0 and pointing to the weakest overall UK construction performance since August 2016.

The index printed not too far off the 50.0 mark that separates contraction from expansion, with the main driver behind the slowdown being a lack of new orders to replace completed projects.

Commercial work dropped at the fastest pace since July last year, with respondents highlighting worries about the economic outlook for the UK, but residential building bucked the overall trend, with housing activity rising at an accelerated pace since July. Meanwhile, civil engineering activity was broadly flat in August.

Tim Moore, associate director at IHS Markit, said: "UK construction companies indicated that lacklustre growth conditions persisted during August. Civil engineering work stagnated, which meant that the construction sector was reliant upon greater house building activity to deliver an outright expansion in output volumes. Commercial development remained by far the worst performing category, with business activity falling at the fastest pace since July 2016.

"Survey respondents noted that subdued business investment and concerns about the UK economic outlook had led to a lack of new work to replace completed projects, especially in the commercial building sector."

In corporate news, Victrex racked up healthy gains after the high-performance polymer solutions company said it expects the annualised impact of Patent Box to reduce its effective tax rate to around 12% from 21%, with an ongoing favourable impact on earnings per share and cash.

On the downside, Micro Focus was weaker despite saying it expects to deliver medium-term benefits from its takeover of Hewlett Packard Enterprise's software business.

Low-cost airline Wizz Air flew a little lower despite reporting a 24.4% jump in passenger numbers in August as the load factor ticked higher.

Acacia Mining was in the red as it said it expects to return to positive cash generation early in 2018 after it stopped underground mining at one of its three Tanzanian mines.

Market Movers

FTSE 100 (UKX) 7,411.47 -0.36%
FTSE 250 (MCX) 19,697.91 -0.45%
techMARK (TASX) 3,408.14 -0.55%

FTSE 100 - Risers

Fresnillo (FRES) 1,664.00p 2.91%
Next (NXT) 4,237.00p 2.49%
DCC (DCC) 7,285.00p 2.03%
Johnson Matthey (JMAT) 2,839.00p 2.01%
Randgold Resources Ltd. (RRS) 8,060.00p 1.90%
Tesco (TSCO) 185.55p 1.34%
Paddy Power Betfair (PPB) 6,960.00p 0.72%
Babcock International Group (BAB) 816.00p 0.62%
BT Group (BT.A) 289.95p 0.52%
British Land Company (BLND) 608.00p 0.50%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 604.50p -2.03%
Mondi (MNDI) 2,086.00p -1.79%
Provident Financial (PFG) 857.00p -1.72%
Prudential (PRU) 1,792.50p -1.67%
Taylor Wimpey (TW.) 198.40p -1.64%
Royal Mail (RMG) 386.00p -1.63%
Standard Life Aberdeen (SLA) 429.90p -1.62%
Barratt Developments (BDEV) 618.50p -1.43%
Standard Chartered (STAN) 763.50p -1.34%
Royal Bank of Scotland Group (RBS) 249.70p -1.23%

FTSE 250 - Risers

Carillion (CLLN) 48.52p 14.38%
Victrex plc (VCT) 2,222.00p 8.66%
Polymetal International (POLY) 896.00p 3.46%
Amec Foster Wheeler (AMFW) 442.10p 3.44%
Wood Group (John) (WG.) 592.50p 3.31%
Hochschild Mining (HOC) 292.60p 2.63%
Cairn Energy (CNE) 174.60p 2.52%
Centamin (DI) (CEY) 158.30p 2.39%
Indivior (INDV) 273.50p 2.20%
Tullow Oil (TLW) 154.50p 2.18%

FTSE 250 - Fallers

Melrose Industries (MRO) 209.30p -4.60%
Coats Group (COA) 76.00p -3.74%
Restaurant Group (RTN) 325.70p -3.44%
Euromoney Institutional Investor (ERM) 1,077.00p -3.41%
Sophos Group (SOPH) 517.50p -2.82%
Acacia Mining (ACA) 201.50p -2.70%
Hikma Pharmaceuticals (HIK) 1,196.00p -2.53%
ZPG Plc (ZPG) 353.70p -2.43%
Millennium & Copthorne Hotels (MLC) 460.00p -2.31%
Redefine International (RDI) 39.13p -2.22%
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