U.K. manufacturing PMI slides to three-month low
U.K. stocks rose for the first time in five sessions on Monday, lifted by shares in energy and mining giants as oil prices gained and data showed a rebound in China's manufacturing activity.
The FTSE 100 index added 0.9% to end at 7,377.09, after ending at the lowest level since early May (http://www.marketwatch.com/story/ftse-100-struggles-as-pound-clings-to-multiweek-high-2017-06-30) on Friday.
Among the biggest gainers, shares of BP PLC (BP.LN) (BP.LN) climbed 1.9% and Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) rose 1.8%. The advances came as crude oil put on more than 1% (http://www.marketwatch.com/story/oil-gains-aiming-for-eight-winning-sessions-in-a-row-2017-07-03), heading for its eighth straight session of gains--its longest win streak in seven years.
Miners were also among the FTSE's leaders after a private gauge of China's factory activity rebounded in June to show an expansion (http://www.marketwatch.com/story/caixin-china-pmi-shows-june-manufacturing-rebound-2017-07-02), indicating an improvement in the country's manufacturing sector. China is a major user of natural resources, so any growth indications from there tend to boost the mining sector.
"The Caixin survey of Chinese manufacturing showed the sector grew at its fastest rate in three months," said David Madden, a CMC Markets UK analyst, in a note. "The second-largest economy in the world is a major importer of minerals, and Glencore, BHP Billiton and Rio Tinto are all higher on the day on the back of the news."
Shares of Glencore PLC (GLEN.LN) added 5%, Anglo American (AAL.LN) put on 4%, and Rio Tinto PLC (RIO) (RIO) (RIO) climbed 4.1%.
Banks also were notable winners, with Royal Bank of Scotland Group PLC (RBS.LN) up 3.4%, HSBC Holdings PLC (HSBA.LN) gaining 2.5%, and Barclays PLC (BCS) tacking on 2.1%.
"Hawkish comments from Bank of England members Mark Carney and Andy Haldane last week are assisting the stocks," Madden said. "Banks have better earning potential in a higher interest rate environment, and the talk of monetary tightening made the stocks attractive."
On a downbeat note, shares of Severn Trent PLC (SVT.LN) lost 0.4% after the water utility company said it's selling its North American business (http://www.marketwatch.com/story/severn-trent-sells-north-american-business-2017-07-03-24851521) for $62 million.
Economic news: The U.K. manufacturing purchasing managers' index for June slid to a three-month low of 54.3 in June (http://www.marketwatch.com/story/uk-manufacturing-pmi-slows-to-3-month-low-2017-07-03), down from 56.3 in May. Economists had expected a reading of 56.0, according to FactSet.
Markit said the data pointed to a "broad-based slowdown," with slower growth recorded across the consumer, intermediate and investment goods sectors.
The pound fell to $1.2969 after the data, after trading above the $1.30 mark earlier in the day. It was recently changing hands at $1.2949.
(END) Dow Jones Newswires
July 03, 2017 12:09 ET (16:09 GMT)