The pound has seen earlier gains pared back after a leading indicator for the UK construction sector fell to a 13-month low. The FTSE 100 is little changed on the day with a small rise briefly moving the index up to its highest level in a month.
Unexpected PMI contraction flashes warning signal
A surprise drop to 48.1 for the UK construction PMI has nipped an early rise in the pound in the bud, with the indicator falling to the lowest level since last August. With the data relating to the prior month’s responses the survey for September is at its weakest since July, which of course was the first full month after the Brexit vote. Upon closer inspection today’s report doesn’t become any more favourable with civil engineering work dropping the most for almost four-and-a-half years and you have to go back to February 2013 to find a bigger decline in commercial development projects. Whilst this data point is the least widely viewed of the three PMIs due out this week, it follows on from Monday’s below forecast manufacturing equivalent and should we get another sub-standard reading in tomorrow’s services PMI - the most important of the trio - then further sterling depreciation may lie ahead.
Ferguson leads the gainers
After reporting a rise in profits in addition to announcing a £500m share buyback Ferguson is the biggest riser on the FTSE 100 this morning, with the stock gaining some 3% to move back above the 5000 level. An 8.6% rise in annual revenues alongside an 8.7% increase to £1.03bn in its trading profit are clear positives for the firm formerly known as Wolseley (LON:FERG) and shares are now changing hands back close to their highest level in the past year. The Miners are also enjoying decent gains with Anglo American (LON:AAL), Rio Tinto (LON:RIO) and Glencore (LON:GLEN) all moving higher. Coca-Cola HBC has seen some selling after the company announced the death of its chief executive Dimitris Lois. The firm is one of the world’s largest bottlers of Coca-Cola with Mr. Lois being on medical leave of absence since mid-September. The stock is lower by a little more than 2% and has fallen below the 3000 handle but remains firmly higher on the year.