London close: Stocks slump as Chinese data, US debt uncertainty weigh

(Sharecast News) - London stocks ended sharply lower on Wednesday as weak Chinese data dented sentiment, and as investors eyed a Congress vote on a deal to avert US debt default. The FTSE 100 closed down 1% at 7,446.14.

Figures released earlier by China's National Bureau of Statistics showed that the manufacturing purchasing managers' index declined to 48.8 in May from 49.2 in April, coming in below consensus expectations for an increase to 49.5.

A reading above 50 indicates expansion, while a reading below signals contraction.

Meanwhile, the non-manufacturing PMI edged down to 54.5 in May from 56.4 the month before, versus expectations for a reading of 55.2.

IG market analyst Chris Beauchamp said: "Markets have not been able to find their footing this afternoon, and as well as the US debt ceiling, are also grappling with renewed signs of a slowdown in China.

"The boost from the reopening of China's economy seems to have faded altogether, and this has meant that recession fears are front and centre once more. The debt ceiling now seems to be mostly a procedural problem, but until it is resolved markets seem determined to remain on edge."

The debt ceiling deal agreed over the weekend cleared the House Rules Committee on Tuesday. It will now make its way to the full House of Representatives.

Rabobank said: "Passage today is seen as crucial to getting this bill through the Senate before the June 5 deadline. Any further delays could still spark fresh market volatility, but an actuary take on this suggests that the more progress this bill makes, the higher its survival rate is."

In equity markets, Prudential lost ground as it said that chief financial officer James Turner had resigned due to an investigation into his conduct relating to "a recent recruitment situation". The company said that Turner had fallen short of the "high standards" the group sets itself.

Ladbrokes owner Entain fell as it said it is seeking a deferred prosecution agreement over alleged bribery at its former Turkish business, and that it was facing a potentially "substantial" financial penalty.

Drax was under the cosh after Ofgem announced an investigation into Drax Power Limited's annual biomass profiling reporting under the Renewables Obligation scheme.

Ithaca Energy was also on the back foot after first-quarter results.

On the upside, B&M Value Retail racked up strong gains after saying it expects current adjusted core earnings to be higher than 2023, as it posted a fall in annual profits.

Aston Martin surged after Canadian billionaire Lawrence Stroll sold £117m of stock to Chinese car giant Geely, which has now upped its stake to around 17%, raising expectations of a potential takeover bid.

WH Smith also ended up as it said its expectations for the full year had improved "modestly", hailing continued strong momentum across its global travel business.

Market Movers

FTSE 100 (UKX) 7,446.14 -1.01% FTSE 250 (MCX) 18,722.90 -0.45% techMARK (TASX) 4,552.24 -0.03%

FTSE 100 - Risers

B&M European Value Retail S.A. (DI) (BME) 509.80p 8.03% Endeavour Mining (EDV) 2,152.00p 5.80% Sage Group (SGE) 871.00p 1.66% AstraZeneca (AZN) 11,660.00p 1.41% Auto Trader Group (AUTO) 630.00p 1.38% SSE (SSE) 1,881.50p 1.24% Relx plc (REL) 2,510.00p 1.01% Rentokil Initial (RTO) 638.60p 0.85% London Stock Exchange Group (LSEG) 8,550.00p 0.83% BT Group (BT.A) 146.85p 0.65%

FTSE 100 - Fallers

Prudential (PRU) 1,056.00p -6.13% Ocado Group (OCDO) 369.00p -5.84% Entain (ENT) 1,319.00p -4.04% Abrdn (ABDN) 198.50p -3.03% Barclays (BARC) 151.34p -2.86% BP (BP.) 453.30p -2.85% WPP (WPP) 854.40p -2.71% Shell (SHEL) 2,220.50p -2.70% Aviva (AV.) 394.20p -2.69% Frasers Group (FRAS) 672.50p -2.54%

FTSE 250 - Risers

Aston Martin Lagonda Global Holdings (AML) 284.00p 9.57% Darktrace (DARK) 282.80p 6.48% Auction Technology Group (ATG) 770.00p 4.05% Renishaw (RSW) 4,046.00p 3.64% Bytes Technology Group (BYIT) 510.00p 3.32% Wetherspoon (J.D.) (JDW) 733.50p 3.24% LondonMetric Property (LMP) 180.00p 3.09% Sirius Real Estate Ltd. (SRE) 82.00p 2.95% WH Smith (SMWH) 1,570.00p 2.75% 4Imprint Group (FOUR) 4,605.00p 2.68%

FTSE 250 - Fallers

Drax Group (DRX) 553.40p -6.17% Ithaca Energy (ITH) 144.20p -5.13% TI Fluid Systems (TIFS) 121.60p -4.85% Hunting (HTG) 219.00p -4.16% Future (FUTR) 722.00p -4.05% Trainline (TRN) 244.80p -3.85% Just Group (JUST) 84.30p -3.77% PureTech Health (PRTC) 218.50p -3.74% ASOS (ASC) 343.30p -3.57% Keller Group (KLR) 679.00p -3.55%