Market overview: FTSE 100 ends higher after slate of factory data

LONDON (ShareCast) – 1630 Close: The FTSE 100 ended up 54.24 points to 6652.61 following reports which showed growth in Chinese and US manufacturing. Decent performances from Aberdeen, Babcock, BHP Billiton (NYSE: BBL – news) and GKN (LSE: GKN.L – news) gave UK markets a lift on Tuesday, as investors shrugged off a worse-than-expected report on UK manufacturing.

16:00 ISM’s manufacturing purchasing managers’ index rose to 53.7 in March from 53.2 month earlier, albeit missing analysts’ forecasts for 54. A reading above 50 signals expansion.

15:00 Markit’s US manufacturing purchasing managers’ index remained at 55.5 in March, in line with the previous month, and beating expectations for a reading of 56.

1406: Sports Direct (Frankfurt: A0MK5S – news) is up over four per cent after Liberum Capital said that it could expand its “limited scale” in many of the 19 European markets in which it already operates. Analyst Sanjay Vidyarthi said that organic growth alone is not viable, but there are “sufficient opportunities such that Sports Direct could have a pipeline of one or two meaningful acquisitions a year.”

1240: Stocks are at their best levels of the day ahead of what is set to be a positive start on Wall Street with futures showing gains of around 0.3 per cent. The US ISM manufacturing index, due out before the opening bell at 14:00, is expected to rise to 54 in March from 53.2 the month before. US auto sales figures are also due out and are expected to rise from 15.3m in February to 15.8m in March. The FTSE 100 is up 34 at 6,633.

1057: Panmure Gordon has upped its view on Babcock to ‘buy’ from ‘hold’ and its target price from 1,350p to 1,525p. The broker said it was comfortable that Avincis should be able to deliver organic growth of 15-20 per cent, driven by its strong order book, and should be able to strengthen its margins. Potential revenue synergies with Babcock, however, will take time to come through, the broker explained to clients. FTSE 100 up 26 to 6,625.

1040: Although the data indicate that the recovery in the sector may have lost some steam during the first quarter “this seems unlikely to herald the beginning of a renewed slowdown,” Capital Economics says. The average output balance over the whole of the first quarter edged down to 58.2 from 59.4 in quarter four. It continues to point to quarterly gains in manufacturing output of over 1 per cent in comparison to the third quarter’s 0.6 per cent rise, the think-tank pointed out.

1011: According to Bloomberg, Metso (Dusseldorf: VLM.DU – news) has said that it has received an unsolicited approach by Weir but is not currently in talks with the UK-listed engineer. Weir has pared losses and is now down just 1.4 per cent at 2,500p, compared with a low of 2,412p.

0951: Consumer staples are among the worst performers on the FTSE 100 this morning, including Diageo (LSE: DGE.L – news) , SABMiller (LSE: SAB.L – news) and Unilever (NYSE: UL – news) . Credit Suisse (NYSE: CS – news) said it predicts that SABMiller’s fourth quarter will be “challenging”, ahead of an update from the beverages group in two weeks’ time. The bank expects a short-term slowdown in organic revenue growth and pointed out that the stock is at a 10 per cent premium valuation to the sector.

0930: Markit’s UK manufacturing purchasing managers index fell to 55.3 in March from 56.7 in the month before (consensus: 56.6). Sterling is bouncing off 200-day moving average on four-hour charts, Alpari Uk’s Craig Erlam points out.

0900: Markit’s Eurozone manufacturing purchasing managers’ index for March has come in at 53, just as expected. Germany’s unemployment rate ticked lower by one tenth of a percentage point to 6.7 per cent from 6.8 per cent in the month before (consensus: 6.8 per cent).

0846: Of possible interest, The Times notes the rise in short interest in shares of Weir towards the end of last week.

0845: UK stocks have started the day slightly higher led by shares of Aberdeen Asset Management (Other OTC: ABDNF – news) following a trading update from the fund manager. Pearson (NYSE: PSO – news) is at the bottom of the pile out on the Footsie, followed by shares of Weir on speculation that it could announce an 8.5bn pound merger with Finnish rival Metso. Consumer staples are lower across the board, with selling to be seen in the likes of Sainsbury (Berlin: SUY1.BE – news) , Tesco (Xetra: TCO.DE – news) or Diageo. The ‘final’ HSBC China PMI slipped a tad further in March, hitting a level of 48, versus the preliminary print of 48.1 and in comparison to the February reading of 48.5. FTSE 100 up 24 to 6,622.

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