London close: Stocks rise on flurry of manufacturing data

(Sharecast News) - London stocks closed positively on Friday, with miners playing a pivotal role following broker upgrades and optimistic Chinese manufacturing data.

The positive sentiment spilt over to the UK manufacturing sector, which was also in focus amid fresh data.

At the close, the FTSE 100 was up 1.01% to reach 7,529.35 points, while the FTSE 250 saw an increase of 0.96%, closing at 18,408.65 points.

In currency markets, sterling was last up 0.5% on the dollar, trading at $1.2687, while it strengthened 0.6% against the euro to change hands at €1.1663.

"Weaker-than-expected eurozone inflation has led to repricing with European yields dropping to multi-month lows as traders price in around 125 basis point ECB rate cuts in 2024," said IG senior market analyst Axel Rudolph.

"Since Wednesday's three-month high, the euro has given back around 1.5% versus the greenback and other crosses.

"The German DAX 40 rallied by close to a percentage point, French and Italy's indices by around half that with the FTSE 100 for once being the outperformer with gains of over a percent."

Rudolph noted that disappointing US factory activity was pushing US equity indices slightly lower, however, ahead of a speech by Fed chair Jerome Powell.

"While the dollar regained some lost ground, the gold price briefly touched a new seven-month high as the oil price flatlined post Thursday's OPEC+ meeting."

UK manufacturing sector improves, house prices unexpectedly rise

In economic news, the UK manufacturing sector showed signs of improvement in November.

The S&P Global/CIPS manufacturing purchasing managers' index (PMI) rose to 47.2, marking the third consecutive monthly increase and the highest since April.

However, it remained below the crucial 50.0 mark, distinguishing contraction from expansion.

All five PMI components, including new orders, output, employment, suppliers' delivery times, and stock purchases, indicated a deterioration in operating conditions, though to a lesser extent than in the previous month.

"Although the downturn in production eased sharply in November, the latest PMI report brings little festive cheer when the finer details are considered," said Rob Dobson, director at S&P Global Market Intelligence.

"With new order inflows and exports continuing to fall sharply and clients destocking, a sustained, meaningful growth revival still looks elusive.

"Manufacturers are preparing for tough times ahead, with their continued caution leading to cutbacks in staffing, inventories and purchasing."

On a different note, UK house prices defied expectations by rising unexpectedly in November.

Nationwide reported a 0.2% month-on-month increase, following a 0.9% rise in October - that marked the third consecutive monthly rise, surpassing forecasts for a 0.4% decline.

On an annual basis, house prices were down 2.2% in November, less severe than the 3.3% drop in the previous month.

Analysts had expected a 2.5% decline.

Nationwide noted that while this performance was relatively weak, it was the most robust outcome since February, with the average home price now standing at £258,557.

"There has been a significant change in market expectations for the future path of Bank Rate in recent months which, if sustained, could provide much needed support for housing market activity," said Nationwide chief economist Robert Gardner.

Turning to the United States, the manufacturing sector faced further challenges in November.

The Institute for Supply Management's manufacturing PMI remained unchanged from October at 46.7.

That marked the 13th consecutive month of decline and fell short of the consensus forecast of a slight improvement to 47.6.

The production index dipped into negative territory at 48.5 from 50.4 the previous month, while the employment gauge declined to 45.8 from 46.8.

At the same time, the new orders index showed some improvement, rising to 48.3 from 45.5, although it remained firmly in contraction territory.

Finally on data, China's manufacturing sector displayed positive momentum in November.

The Caixin/S&P Global manufacturing purchasing managers' index (PMI) increased to 50.7, up from 49.5 in October.

That marked the fastest expansion in three months and contrasted with the official manufacturing PMI released earlier, which showed a slight decline to 49.4 from 49.5.

Miners get a boost, Tesco slips on downgrade

On London's equity markets, mining stocks saw a substantial boost, primarily attributed to the positive Chinese data and some favourable broker notes.

Anglo American and Antofagasta both surged, following upgrades from 'neutral' to 'buy' by UBS.

Rio Tinto and Glencore also posted sharp gains in response to the upbeat sentiment.

Bootmaker Dr Martens rebounded with a 5.88% increase in its stock price, recovering from a tumble in the previous session triggered by a profit warning.

Housebuilders also had a solid day, with Crest Nicholson, Bellway, Persimmon, and Redrow all registering gains.

The positive momentum came after the Nationwide data showed an unexpected rise in UK house prices for November.

On the downside, Tesco fell 2.17% following a downgrade from 'neutral' to 'underweight' by JPMorgan.

Similarly, Pearson saw a 1.62% drop after receiving a downgrade from 'buy' to 'hold' at Deutsche Bank.

Trainline experienced a significant setback, with its stock sliding by 3.6% after a downgrade to 'hold' by Panmure Gordon.

Ceres Power Holdings slid 7.19% after it reported expectations of a decrease in full-year revenues, projected to be around £20m to £21m, down from £22m in the 2022 financial year.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,529.35 1.01% FTSE 250 (MCX) 18,408.65 0.96% techMARK (TASX) 4,087.37 0.45%

FTSE 100 - Risers

Anglo American (AAL) 2,311.00p 7.89% Antofagasta (ANTO) 1,495.50p 6.18% Rio Tinto (RIO) 5,599.00p 3.70% Glencore (GLEN) 457.70p 3.60% InterContinental Hotels Group (IHG) 6,304.00p 3.07% Whitbread (WTB) 3,179.00p 2.94% Rolls-Royce Holdings (RR.) 276.70p 2.94% Melrose Industries (MRO) 533.80p 2.93% Ashtead Group (AHT) 4,905.00p 2.90% Endeavour Mining (EDV) 1,891.00p 2.83%

FTSE 100 - Fallers

Tesco (TSCO) 279.60p -2.17% Pearson (PSON) 919.60p -1.88% Ocado Group (OCDO) 594.20p -0.97% Hargreaves Lansdown (HL.) 712.20p -0.86% Legal & General Group (LGEN) 227.60p -0.78% Scottish Mortgage Inv Trust (SMT) 719.00p -0.77% Auto Trader Group (AUTO) 721.80p -0.47% Sainsbury (J) (SBRY) 284.60p -0.45% Rentokil Initial (RTO) 427.70p -0.23% Bunzl (BNZL) 2,996.00p -0.20%

FTSE 250 - Risers

Dr. Martens (DOCS) 95.50p 5.88% Great Portland Estates (GPE) 400.40p 4.71% easyJet (EZJ) 472.80p 4.30% Petershill Partners (PHLL) 149.40p 4.20% IWG (IWG) 148.60p 4.06% Centamin (DI) (CEY) 100.50p 3.93% Carnival (CCL) 1,081.50p 3.89% Tritax Eurobox (GBP) (EBOX) 57.30p 3.80% Hipgnosis Songs Fund Limited NPV (SONG) 68.60p 3.63% Just Group (JUST) 83.40p 3.60%

FTSE 250 - Fallers

Ceres Power Holdings (CWR) 174.30p -7.19% Digital 9 Infrastructure NPV (DGI9) 30.65p -3.62% Spirent Communications (SPT) 110.30p -3.42% Genus (GNS) 1,909.00p -3.39% AJ Bell (AJB) 250.00p -2.19% Trainline (TRN) 279.60p -1.96% CAB Payments Holdings (CABP) 56.40p -1.91% Pets at Home Group (PETS) 314.40p -1.81% Hilton Food Group (HFG) 724.00p -1.76% Aston Martin Lagonda Global Holdings (AML) 223.20p -1.67%