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London open: FTSE flat ahead of UK construction data
The FTSE opened flat on Tuesday ahead of a report that is expected to show a slowdown in UK construction activity growth. The Markit/CIPS UK construction purchasing mangers’ index is estimated to fall to 58.8 in October from 59.9 a month earlier. A reading above 50 signals an expansion while a level below that indicates a contraction.
“The construction sector did some serious damage to the UK’s GDP in the third quarter, so investors will be eyeing today’s number carefully to note the potential impact on Q4’s growth,” said Connor Campbell, financial analyst at Spreadex. “With that in mind investors seemed wary of doing much FTSE-wise, leaving the UK index effectively flat at the open.”
The report follows Monday’s impressive UK manufacturing PMI which rose from an upwardly revised 51.8 in September to a 16-month high of 55.5 last month, exceeding analysts’ expectations for a 51.3 reading.
Meanwhile, data on US factory orders is due at 1500 GMT, which analysts predicting a 0.9% fall in September.
Company-wise, Standard Chartered slumped after posting a disappointing third quarter and launched a capital raise to strengthen the balance sheet and support its strategic review.
Associated British Foods dipped after the owner of Primark reported a 30% slump in pre-tax profit for the year ended 12 September as the company was hit by lower sugar prices and adverse currency moves.
Royal Dutch Shell climbed as it announced it will accelerate the implementation of measures to deal with a prolonged downturn in oil prices once the acquisition of BG Group is complete. BG also rallied on the news.
Imperial Tobacco increased as it posted a rise in pre-tax profit and underlying tobacco net revenue for the year ended 30 September and said it was well placed to meet expectations for the coming year, despite a drop in overall revenues.
