Defensive stocks dominated the FTSE 100 leader board as weak data from Germany injected some caution into the markets.
The UK blue-chip index shed 15 points, or 0.2%, with defensive utilities among the risers, as Germany reported a 1.8% fall in industrial output in May. The decline surprised investors, who had expected a smaller fall of 0.3%. It follows Friday’s announcement of a 1.7% decline in factory orders.
‘The biggest concern remains that Europe’s biggest economy, that of Germany, is starting to stall, while the French economy looks set for another recession after last week’s most recent data, showing deeper contractions in economic activity,’ said Michael Hewson, chief market analyst at CMC Markets UK.
‘Friday’s surprise 1.7% decline in Germany factory orders for May only served to reinforce the caution about the German economy, even allowing for the European Central Bank’s insistence that it remains ready to act further if necessary.’
Among FTSE 100 stocks posting gains were water utilities Severn Trent (SVT) and United Utilities (UU), up 0.1% and 0.8% at £19.76 and 901p respectively. Telecoms group BT Group (BT) added 2p, or 0.5%, to 390.1p while electricity and gas distributor National Grid (NG) rose 5p, or 0.6%, to 855.9p.
Weir Group (WEIR) was the biggest riser, jumping 64p, or 2.4%, to £27.81 after analysts at Citigroup upgraded the valve and pump manufacturer from ‘neutral’ to ‘buy’, raising its price target from £26 to £31.
FTSE 250 stock Taylor Wimpey (TW) fell 1.9% to 114.9p as the housebuilder succumbed to profit-taking after reporting strong sales for the first half of its financial year.
Gold edged lower, falling to $1,314.40 as the safe-haven asset continued to wane in the wake of strong economic data from the US. Oil also continued its fall, trading below $111 a barrel at a three-week low on expectations of a rise in supplies from Libya, where the government has taken over two terminals from rebels.