Stocks in London were down at the close on Tuesday, amid disappointing manufacturing data from both the US and the UK.
The FTSE 100 index closed down 11.72 points, 0.2%, at 7,721.52. The FTSE 250 ended down 177.83 points, 0.9%, at 19,511.80, and the AIM All-Share closed down 1.77 points, or 0.2%, at 761.55.
The Cboe UK 100 ended down 0.3% at 770.31, the Cboe UK 250 closed down 1.2% at 16,966.88, and the Cboe Small Companies ended down 0.3% at 14,953.49.
In European equities on Tuesday, the CAC 40 in Paris ended down 0.2%, while the DAX 40 in Frankfurt ended up 0.1%.
Stocks struggled on the first day of trading in 2024, showing signs of anxiety of what is to come in the next 12 months.
‘Markets got off to a cautious start on the first trading day of 2024, perhaps setting the tone for what could be a volatile year jam packed with political jostling ahead of crunch elections,’ said Russ Mould, investment director at AJ Bell.
Analysts are also anxiously eyeing the trajectory of interest rates in the coming months.
Tuesday has been marked by a slew of manufacturing releases from around the world, but there was little to celebrate.
The US manufacturing sector ended 2023 with another month of decline.
The latest S&P Global manufacturing purchasing managers’ index fell to 47.9 points in December, from 49.4 in November and lower than the earlier flash estimate of 48.2.
Sinking further below the 50.0 mark which separates growth from decline, the latest reading suggests the decline in the manufacturing sector intensified last month.
Meanwhile, the UK’s latest manufacturing PMI fell to 46.2 points in December, having risen to a seven-month high of 47.2 in November. The PMI fell further below the 50-point no-change mark, remaining below the threshold for the 17th consecutive month.
The figure landed below the flash estimate of 46.4.
‘The UK manufacturing sector ended 2023 on a weak footing. The downturn in production volumes accelerated as intakes of new work from both domestic and export clients declined. The further slide in output volumes reflected overstocking at clients and tighter inventory policies at manufacturers,’ S&P Global said.
The dollar was mostly higher on Tuesday afternoon.
The pound was quoted at $1.2620 at the London equities close Tuesday, down compared to $1.2747 at the close on Friday. The euro stood at $1.0955 at the European equities close Tuesday, down against $1.1074 at the same time on Friday.
However, against the yen, the dollar was trading at JP¥141.74, up compared to JP¥141.42 late Friday.
In the FTSE 100, oil firms Shell and BP rose 1.0% and 0.9%, respectively, on the back of higher oil prices.
Brent oil was quoted at $77.75 a barrel at the London equities close Tuesday from $77.56 late Friday.
‘Tensions in the Red Sea, one of the world’s most important shipping routes, have pushed up the price of oil on fears about supply disruptions,’ AJ Bell investment director Russ Mould explained.
Meanwhile, BT rose 1.1%, while WPP lost 1.1%, after Sky News on Monday reported that outgoing BT Chief Philip Jansen has been approached about becoming the next chair of WPP.
Jansen, who is set to leave BT in the spring, is reportedly one of a number of candidates to have been considered in recent weeks for the WPP chairmanship.
City sources on Monday said WPP’s search was yet to reach an advanced stage and that there was no certainty that Jansen or WPP would opt to progress his candidacy further.
On AIM, LungLife AI surged 37%, after the developer of clinical diagnostic solutions designed to address the early detection of lung cancer announced the successful validation of its LungLB test for indeterminate lung nodules.
The LungLB test is a blood-based tool used by clinicians to help with earlier diagnosis of lung cancer nodules.
The diagnostic demonstrates a positive predictive value of 81% in distinguishing benign from cancerous lung nodules in patients with nodules smaller than 15 millimetres. This surpasses the current clinical standard of around 60%.
On the other hand, Plexus, an oil and gas engineering services business, lost 18%.
Plexus said it has completed an agreement with SLB to replace an existing surface production wellhead licence with a new licence over a wider field of use for $5.2 million in cash.
Stocks in New York were lower at the London equities close, with the DJIA down 0.1%, the S&P 500 index down 0.6%, and the Nasdaq Composite down 1.5%.
Over in New York, Chevron rose 1.0%.
The San Ramon, California-based oil and gas company said that for the fourth quarter of 2023, it will be impairing a portion of its US upsteam assets, primarily in California. It explained that this is primarily due to ‘continuing regulatory challenges in the state that have resulted in lower anticipated future investment levels in its business plans.’
Chevron noted that this will result in a hit of between $3.5 million and $4.0 million to its fourth quarter results.
Gold was quoted at $2,064.66 an ounce at the London equities close Tuesday, slightly lower against $2,065.02 at the close on Friday.
In Wednesday’s UK corporate calendar, Jubilee Metals will hold its general meeting, regarding an equity raise for the metal processing company.
The economic calendar for Wednesday has unemployment data from Germany and Spain.
In the US, the latest Federal Reserve meeting minutes will be released. There is also the US ISM manufacturing PMI data.
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