Proactive Investors -
- FTSE 100 falls 5 points to 8,371
- Rightmove (LON:RMV) surges as Aussie-listed REA considers offer
- China manufacturing and housing data hits miners
UK manufacturing PMI in line with expectations
Things were more positive in the UK manufacturing sector last month, according to the S&P Global manufacturing purchasing managers' index (PMI) survey for August, which rose to a 26-month high, as expected.
The index printed at a level of 52.5, up from 52.1 in July and the same as the flash reading midway through the month. A reading above 50 points to growth.
Manufacturing output, new orders and employment all rose in the month, S&P said, with August seeing new business rise for the fourth month in a row and reports of a move away from destocking at clients, which contributed to higher intakes of new work.
Domestic orders were the main spur of new contract wins, as new export orders decreased for the thirty-first consecutive month.
As for inflation, price pressures eased further, with rates input costs and selling prices both slowing.
FTSE inches up
The FTSE 100 has broken into positive territory, led by Rightmove's near 20% gain and with a few related companies carried higher in its wake.
Fellow classified sector name Auto Trader is up 1.1%, while housebuilder Barratt Developments (LON:BDEV) PLC is up ahead of its results later this week.
Oil giants Shell (LON:SHEL) and BP (LON:BP) are both in green too, giving the index a lift.
Rightmove situation "could get messy"
Reacting to the 20% jump in Rightmove shares this morning, analyst Sean Kealy at Panmure Liberum says Rightmove has not been approached by REA, "and the leak looks to have forced this into the open before much progress had been made at all.
"This could create a messy situation", he says, given short-selling of Rightmove shares and REA's statement that the offer would be partially in shares, "meaning we'd expect a large equity placing to fund any cash component too".
Jessica Pok at Peel Hunt (LON:PEEL) notes that REA Group is Australia’s largest property listing company and the pair are the "most closely compared property portals, given the similarities of the UK and Australian property markets"
The company has until the end of September to make a formal offer, she points out.
FTSE 250 also in the red
The FTSE 250 has also started September with a red-inker, down 0.36% while its blue-chip sibling is down 0.22%.
Leading the fallers on the mid-cap index is IT provider Kainos Group PLC (LON:KNOS).
It says for its current financial year to March 2025, directors expected profit to be in line with current market forecasts, but with only a "small increase" in group revenues due to a tougher trading environment for services, which will be below current forecasts.