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FTSE rings in 2014 with small dip
by Chris Marshall on Jan 02, 2014 at 09:38
The FTSE 100 started 2014 on a low after China’s official gauge of manufacturing activity declined for the first time in seven months.
The move, echoed across other major European indices, comes at the start of what market commentators generally expect to be another positive year for equities.
A late December rally helped the FTSE 100 top a gain of some 14% last year, though lagging the US S&P 500’s 29% leap higher.
Rises this year are expected to be more muted, even as investors continue to enjoy an economic recovery and cheap central bank money.
With some market traders still not back at their desks after the Christmas break, Thursday morning’s focus was on China’s manufacturing Purchasing Managers' Index (PMI), which dropped to 51 in December from 51.4 in November. The final HSBC/Markit manufacturing PMI slipped to a three-month low of 50.5 in December from 50.8 in November.
‘We expect the impact of tight liquidity conditions to become more pronounced entering H1 2014, commented Yao Wei of Societe Generale after recent high money market rates.
Asian markets had mostly slipped lower after the data, with Japan’s Nikkei closed until Monday.
Of London shares, mining companies were pegged back by the weaker Chinese data with Anglo American and Antofagasta among the biggest fallers.
Debenhams fell 0.7% to 72p after the high street retailer announced that finance director Simon Herrick had quit. The news comes two days after the group hit investors with a profit warning.
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