Weak PMI figures offset gains by oil majors as London stocks slip

London’s markets stumbled as early economic data for August revealed a weak showing for UK factories as customer demand continues to dwindle.

The downbeat purchasing managers index (PMI) report offset positivity among oil firms, who were boosted by the latest rebound in prices.

Early trading was nervous around Europe after the biggest economies in the region all showed weakness in their manufacturing sectors, before this trading sentiment was compounded further by a slowdown in activity in the US.

The FTSE 100 ended the day down 45.68 points, or 0.61%, at 7,488.11.

Michael Hewson, chief market analyst at CMC Markets UK, said: “It’s been another day of poor economic data for European markets with the latest flash manufacturing PMI numbers falling into contraction territory for Germany, France, and the UK.

“While the economic data has been poor the reaction of markets has been slightly more ambivalent and a little mixed, with the Dax and Cac 40 treading water, having opened just above three-week lows.

“The FTSE 100 is underperforming though today’s weakness may be more to do with the fact that it has managed to perform better than its peers over the past week and is playing catch-down so to speak.”

The German Dax decreased 0.33% by the end of the session while the French Cac dropped by 0.42%.

On Wall Street, the Dow Jones opened in the red after the PMI figures showed US private sector output sliding to a 27-month low.

Meanwhile, the pound was down 0.02% against the dollar at 1.185 and was 0.07% lower against the euro at 1.187 at the close.

In company news, BT shares finished higher after confirmation that French-Israeli billionaire Patrick Drahi will not be blocked from increasing his stake in the telecommunications giant following a national security review.

The company told shareholders that ministers will not demand that Mr Drahi’s Altice sell off part of its nearly one-fifth holding in the firm. It closed 0.8p higher at 157.1p as a result.

Travel firm On The Beach jumped in value after founder and chief executive officer Simon Cooper bought almost £2 million worth of shares.

The company closed 11.6p higher at 126.4p after he bought 1.5 million shares at 129.54p each.

Investors slammed the brakes on Halfords after Panmure Gordon downgraded the stock and slashed its target price in half.

The bike and car accessories retailer finished 25.1p lower at 128.3p after the brokers warned the firm is “naturally at some risk coming into the period of significantly increased pressure on consumer spending in 2022”.

The price of oil continued to rebound after comments from Saudi Arabia that it might look at cutting output due to concerns about the recent sharp drop in prices.

Brent crude oil lifted by 3.25% to 99.62 US dollars per barrel when the London markets closed.

The biggest risers on the FTSE 100 were Antofagasta, up 37p at 1,162p, Shell, up 73.5p at 2,317.5p, Anglo American, up 89.5p at 2,943.5p, Glencore, up 13.8p at 506p, and BP, up 10.4p at 459.4p.

The biggest fallers of the day were Ocado, down 42.2p at 798.8p, Informa, down 25p at 542.6p, Smiths Group, down 58p at 1,509p, Sage Group, down 24.2p at 712.6p, and Relx, down 76p at 2,364p.