Big mining stocks in London were giving back gains made last week, sending the FTSE 100 index lower at midday on Monday.
The FTSE 100 index was down 37.28 points, or 0.5%, at 7,909.83, while the FTSE 250 was up points 30.01 points, or 0.2%, at 19,955.78. The AIM All-Share was down 2.34 points, or 0.3%, at 862.63.
The Cboe UK 100 was down 0.5% at 791.60, the Cboe UK 250 was flat at 17,495.79, and the Cboe Small Companies was down 0.5% at 13,876.58.
Sterling was slightly stronger at midday on Monday, despite unexpected positive news for the UK construction sector.
Construction activity picked up in the UK during February, as a rebound in commercial work offset a continued decline in housebuilding.
The S&P Global/CIPS UK construction purchasing managers’ index rose to 54.6 points in February, from 48.4 in January.
Crossing over the 50-point no-change mark, it shows the sector saw a strong expansion in activity during the month. The reading was the highest since May last year, and well ahead of market consensus of 48.5, as cited by FXStreet.
The pound was quoted at $1.2006 at midday on Monday in London, higher compared to $1.1979 at the close on Friday.
In London, miners were amongst the worst blue-chip performers at midday, with Anglo American, Glencore, and Fresnillo falling 4.2%, 3.0%, and 2.1%, respectively. This is a reversal of last week, when a 1.2% five-day rise for the FTSE 100 was largely thanks to the same mining stocks.
On Monday, the miners were hit by a prediction by Chinese Premier Li Keqiang that the Chinese economy will grow by ‘around 5%’ this year. This is down from last year’s growth target of 5.5%. In the fourth quarter of last year, the Chinese economy grew by just 2.9%.
This year’s target was not as high as had been hoped, particularly given the recent resurgence in factory activity and business confidence following the lifting of Covid restrictions.
Not just a powerhouse of the global economy, China is a major buyer of commodities, so the outlook for demand now looks gloomier than expected.
Brent oil was quoted at $84.54 a barrel at midday in London on Monday, down from $85.34 late Friday. Gold was quoted at $1,848.67 an ounce, slightly higher against $1,845.56.
In the FTSE 250, Aston Martin jumped 15% as Jefferies raised the target price for the stock to 160p from 120p.
Last Wednesday, the luxury carmaker hailed its ‘strongest order book in many years’ and closed off 2022 with a good final quarter, setting off a series of price target hikes by analysts.
Clarkson was up 5.5% after it reported a ‘record’ performance in 2022, with revenue and profit both rising by double-digit percentages, and it raised its payout for the 20th year in a row.
The integrated shipping services provider said revenue jumped by 36% to £603.8 million from £443.3 million, driven mainly by the Broking division, as pretax profit increased by 45% to £100.1 million from £69.1 million.
Chief Executive Officer Andi Case said it was a ‘record year’ for Clarksons and the company looked ahead to 2023 with confidence.
Peel Hunt said the 2022 results were ahead of the broker’s own expectations for revenue, pretax profit and earnings per share, and it noted that Clarkson has a strong forward order book.
Elsewhere in London, Foxtons climbed 4.5% after it said it bought Atkinson McLeod for £7.4 million, confirming a report by Sky News on Sunday.
Atkinson McLeod is an estate agent operating in central and east London with four branches and increases Foxtons’ exposure to the lettings market. Foxtons said the acquisition is expected to be accretive to earnings this year.
Meanwhile, James Fisher & Sons dropped 4.2%. The marine services provider said it sold its loss-making nuclear services business, James Fisher Nuclear, and its associated properties, and will take an impairment as a result.
James Fisher will receive the nominal sum of £3 for the business. It will impair the value of goodwill and tangible fixed assets of JFN in its annual results for 2022, in which the business will be shown as a discontinued operation.
In 2021, the division recorded a pretax loss of £100,000 on third-party revenue of £51.7 million.
On AIM, Fusion Antibodies plunged 32% after it said it expects annual revenue to be significantly below expectations as a result of continued uncertainty in the timings of orders.
Revenue in the financial year ending March 31 is now expected at no less than £2.8 million, ‘significantly’ below current market expectations.
In European equities on Monday, the CAC 40 in Paris and the DAX 40 in Frankfurt were both up 0.3%.
The eurozone’s construction sector contracted further in February, but at a slower pace than in January. The eurozone’s construction PMI rose to 47.6 points in February from 46.1 in January.
In addition, retail sales in the eurozone unexpectedly fell year-on-year in January. Compared to January 2022, retail sales were 2.3% lower.
The decline slowed slightly from the annual fall of 2.8% seen in December. However, the result was well behind market consensus, which had expected growth of 1.9%.
‘This confirms the weak momentum in consumer spending at the start of 2023, contrary to the sustained pick-up in consumer confidence,’ commented Oxford Economics.
The euro stood at $1.0633, higher against $1.0601. Against the yen, the dollar was trading at JP¥136.11, lower compared to JP¥136.21.
US Federal Reserve Chair Jerome Powell will give his semi-annual report on monetary policy to Congress on Tuesday and Wednesday. Ricardo Evangelista said this could create scope for dollar losses, should the central bank head present a ‘less hawkish tone than some of his peers have done recently’.
The next Federal Open Market Committee meeting is on March 21 and 22.
Stocks in New York were called flat. The Dow Jones Industrial Average and the S&P 500 index were seen marginally lower, while the Nasdaq Composite was pointed marginally higher.
Still to come on Monday’s economic calendar, US factory orders are published at 1500 GMT.
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