London open: Stocks fall after weak China data

(Sharecast News) - London stocks fell in early trade on Wednesday as weak Chinese data dented sentiment. At 0825 BST, the FTSE 100 was down 0.8% at 7,464.77.

Figures released earlier by the 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.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "Growth slowdown fears have accelerated as the latest data from China shows a faltering recovery, knocking back sentiment on markets. Investors have been unnerved by the snapshot showing the Chinese manufacturing sector contracted again in May, while activity across services also slowed for the fourth month in a row.

"Far from being the powerhouse which will offset America's slowdown, China's economic recovery from the pandemic is looking more precarious. A cloudy geo-political landscape is also causing concern, amid ongoing chip wars and sanctions, after it emerged that China turned down a US request for their defence chiefs to meet on the sidelines of a summit in Singapore."

Streeter said worries are also lingering about the obstacles still in the path of the US budget legislation aimed at raising the debt ceiling, with harder line Republicans still strident in their opposition.

"By passing the House rules committee, it's cleared the first hurdle, but it has plenty of other congressional jumps to navigate, before the new deadline on June 5, as lawmakers opposing increased spending limits turn more vocal," she said.

"Today it'll be debated in the House of Representatives with a vote expected later, before it heads to the Senate and it'll be under intense scrutiny every step of the way."

In equity markets, Ladbrokes owner Entain slumped 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.

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

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

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

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

Fresh food provider Bakkavor gained after it lifted its full-year profit outlook as it reported an "encouraging" first-quarter trading performance, in line with expectations.

Market Movers

FTSE 100 (UKX) 7,464.77 -0.76% FTSE 250 (MCX) 18,710.42 -0.52% techMARK (TASX) 4,532.02 -0.48%

FTSE 100 - Risers

B&M European Value Retail S.A. (DI) (BME) 484.10p 2.59% Endeavour Mining (EDV) 2,048.00p 0.69% Centrica (CNA) 120.60p 0.58% Pershing Square Holdings Ltd NPV (PSH) 2,774.00p 0.51% SSE (SSE) 1,867.00p 0.46% British American Tobacco (BATS) 2,609.00p 0.44% Severn Trent (SVT) 2,762.00p 0.18% Compass Group (CPG) 2,209.00p 0.14% United Utilities Group (UU.) 1,011.50p 0.10% Auto Trader Group (AUTO) 622.00p 0.10%

FTSE 100 - Fallers

Entain (ENT) 1,338.00p -2.66% Prudential (PRU) 1,096.00p -2.58% Ocado Group (OCDO) 383.10p -2.25% Burberry Group (BRBY) 2,162.00p -2.08% Ashtead Group (AHT) 4,840.00p -1.98% Johnson Matthey (JMAT) 1,708.00p -1.92% Shell (SHEL) 2,239.00p -1.88% Standard Chartered (STAN) 631.80p -1.77% Weir Group (WEIR) 1,697.00p -1.68% International Consolidated Airlines Group SA (CDI) (IAG) 154.45p -1.62%

FTSE 250 - Risers

Keller Group (KLR) 731.00p 3.84% Wetherspoon (J.D.) (JDW) 737.50p 3.80% Marshalls (MSLH) 308.00p 2.74% TP Icap Group (TCAP) 157.90p 2.53% Mitchells & Butlers (MAB) 206.20p 2.18% Chemring Group (CHG) 263.00p 1.54% Sirius Real Estate Ltd. (SRE) 80.60p 1.19% Hipgnosis Songs Fund Limited NPV (SONG) 81.60p 1.12% JPMorgan Emerging Markets Inv Trust (JMG) 104.60p 0.58% Genus (GNS) 2,508.00p 0.48%

FTSE 250 - Fallers

Auction Technology Group (ATG) 705.00p -4.73% Drax Group (DRX) 573.60p -2.75% Currys (CURY) 49.56p -2.73% Oxford Instruments (OXIG) 2,650.00p -2.57% Wizz Air Holdings (WIZZ) 2,795.00p -2.00% Hammerson (HMSO) 24.80p -1.98% Warehouse Reit (WHR) 99.60p -1.97% TI Fluid Systems (TIFS) 125.40p -1.88% Indivior (INDV) 1,434.00p -1.85% International Distributions Services (IDS) 195.40p -1.83%