European gloom drags FTSE into red
The FTSE 100 closed in the red despite better-than-forecast economic figures for August after it was dragged down by widespread negativity across Europe.
August’sflashpurchasingmanagers’index figures for UK industry showed accelerating growth across the manufacturing and services sector, surpassing analyst expectations.
However, many of the UK’S biggest stocks finished lower after disappointing figures from peers on the continent hit trading sentiment and drove concerns over exports.
London’s top flight closed 11.45 points lower at 6,001.89.
David Madden, analyst at CMC Markets UK, said: “Stock markets in Europe are showing large losses as traders are fearful the rebound in the eurozone economy is cooling. The flash manufacturing and services data for August from France was disappointing, and the German reports were not great either, so there are concerns the two largest economies in the euro area could be moving down a gear.
“In contrast, the UK manufacturing and services updates showed decent growth on the month as well as exceeding forecasts, but the FTSE 100 has been dragged lower by its continental counterparts.”
Across the Atlantic, the Dow Jones lifted higher after Wall Street welcomed robust manufacturing and services output in the latest set of US figures.
Meanwhile, sterling slumped against a strong dollar while a lack of progress in UKEU talks also hit the currency.
The pound fell 0.91 per cent versus the US dollar at $1.309 and was down 0.12 per cent against the euro at €1.112.
Airline stocks had a rare bit of respite, floating higher after the UK government added Portugal to its travel corridor list.
In company news, Rolls-royce closed up by 2.3p to 258.3p after revealing that it will enter into a strategic partnership with Reaction Engines to develop high-speed aircraft propulsion systems.
Premier Oil ended the day 3.25p lower at 22.49p after announcing plans to raise $530 million (£404.7m) from an equity release. When the funds are raised, $230m will be paid to BP for North Sea oil assets, and $300m has been earmarked to pay down debt, it said.