London close: Stocks end little changed despite weak reading on industry
London stocks reversed an earlier small loss to trade slightly higher by the close of trading on Monday despite resilience in the pound against the greenback even after the release of weaker-than-expected data on industrial trends.
The FTSE 100 was up by 0.02% to 7,524.45 with the pound 0.12% higher against the dollar to 1.3198 after the latest survey from the Confederation of British Industry showed growth in UK manufacturing activity unexpectedly softened in the three months to October, while business optimism fell for the first time in a year.
Sterling was also up on the euro at 1.1225 amid worries about the situation in Catalonia.
The CBI's factory order book balance fell to -2 from +7 in September, missing expectations for a jump to +9 and marking its lowest level since November.
The softening was driven by a sharp slowdown in activity in the food, drink and tobacco sector, in particular, but was also relatively broad-based, with 14 out of 17 sub-sectors registering a deterioration in output compared to the previous quarter. Nevertheless, growth in October remained far above the long-run average.
Meanwhile, export order growth also slowed, while output expectations fell to +19 from +28. The survey also found that optimism about business conditions fell for to -11 from +5.
Still, Pantheon Macroeconomics economist Samuel Tombs said demand likely hasn't deteriorated as sharply as the survey suggests.
"The total orders balance is comprised of manufacturers reporting whether orders are above or below ‘normal’. The balance is not seasonally adjusted, and it has fallen- by six points on average - in all but three Octobers during the last 40 years. Even so, our seasonally adjusted version of the CBI’s orders balance fell to +4 in October - its lowest level since December - from +7 in September."
In corporate news, Spire Healthcare surged after rejecting a cash-and-shares offer from larger rival Mediclinic International. Mediclinic, which already owns a 29.9% stake in its FTSE 250 peer, offered 150p cash and 0.232 new shares for each Spire share, which equated to an offer valued at 298.6p per share.
GlaxoSmithKline was lower even after it said that the US Food and Drug Administration has approved Shingrix for the prevention of shingles in adults over 50.
Similarly, AstraZeneca was down in tandem despite the FDA approved a new formulation of its type-2 diabetes treatment Bydureon and as it and Merck & Co submitted a new drug application to Japan's Pharmaceuticals and Medical Devices Agency for the use of Lynparza tablets in unresectable or recurrent BRCA-mutated breast cancer.
GKN racked up strong gains following a Sunday Times report that the company is looking to split its aerospace and auto operations and as Liberum upgraded the stock to 'hold' from 'sell'.
Electra Private Equity rallied as it said that after completing a strategic review, it has decided "current market conditions do not support new investment" and so proposed handing back most of its cash and dropping its focus on private equity to become "more flexible".
Waste-to-product business Renewi surged after saying results for the year are expected to be “significantly above” its previous expectations following a particularly strong performance in September.
CRH was in the black after getting approval from Ash Grove Cement shareholders for its $3.5bn acquisition of the US cement manufacturer.
Essentra gained after saying trading in the third quarter showed modest like-for-like revenue growth for the overall group.
Capita edged down after it said it expects to complete the sale of its Asset Services businesses to Link Administration a week on Friday.
Auto Trader and Inchcape declined after peer Pendragon warned that full-year profit will be hit by weaker new car demand and pricing on used cars. Pendragon shares tanked 20% on the warning.
IWG was hit by a downgrade to 'neutral' from 'outperform' at Credit Suisse.
FTSE 100 - Risers
GKN (GKN) 319.00p 5.14%
Micro Focus International (MCRO) 2,521.00p 2.19%
Associated British Foods (ABF) 3,375.00p 1.50%
Centrica (CNA) 175.70p 1.50%
Fresnillo (FRES) 1,385.00p 1.32%
BT Group (BT.A) 274.05p 1.18%
Smiths Group (SMIN) 1,573.00p 1.16%
Ferguson (FERG) 5,350.00p 1.04%
National Grid (NG.) 935.20p 1.02%
CRH (CRH) 2,818.00p 1.00%
FTSE 100 - Fallers
Mediclinic International (MDC) 623.00p -2.73%
ITV (ITV) 171.90p -1.72%
RSA Insurance Group (RSA) 631.00p -1.56%
Hammerson (HMSO) 521.00p -1.51%
Morrison (Wm) Supermarkets (MRW) 232.20p -1.28%
British Land Company (BLND) 603.50p -1.15%
Royal Bank of Scotland Group (RBS) 279.10p -1.13%
Informa (INF) 683.00p -1.01%
Old Mutual (OML) 195.20p -1.01%
Tesco (TSCO) 187.05p -0.98%
FTSE 250 - Risers
Spire Healthcare Group (SPI) 301.00p 15.19%
Renewi (RWI) 103.80p 5.33%
Softcat (SCT) 516.00p 5.20%
Sophos Group (SOPH) 603.50p 4.32%
Just Eat (JE.) 717.00p 2.72%
Cairn Energy (CNE) 200.70p 2.61%
Homeserve (HSV) 850.00p 2.47%
Vedanta Resources (VED) 890.50p 2.42%
SSP Group (SSPG) 580.00p 2.29%
Marshalls (MSLH) 480.20p 2.17%
FTSE 250 - Fallers
Acacia Mining (ACA) 186.30p -4.36%
IWG (IWG) 212.00p -3.11%
Workspace Group (WKP) 883.00p -3.07%
St. Modwen Properties (SMP) 376.60p -2.71%
3i Infrastructure (3IN) 202.10p -2.65%
Inchcape (INCH) 799.00p -2.62%
Vectura Group (VEC) 100.70p -2.61%
Virgin Money Holdings (UK) (VM.) 293.80p -2.55%
Paragon Banking Group (PAG) 462.40p -2.39%
Hikma Pharmaceuticals (HIK) 1,170.00p -2.34%