London midday: Gains erased as resource stocks shrug off Chinese data

14th Dec 2012 11:54

After a positive start, London's benchmark FTSE 100 index slipped into the red by midday, as investors shrugged off some better-than-expected data from Asian powerhouse China.The HSBC China flash manufacturing purchasing managers' index (PMI) rose from 50.5 to 50.9 in December, slightly above the 50.8 forecast. This was its highest level since October 2011."It is also the fifth consecutive month that the figure has improved which suggests, along with other data, that the economy bottomed out back in the third quarter," said analyst Craig Erlam from Alpari."As always with Chinese manufacturing data, this is good news globally as well as domestically. A strong China will be key to driving the global recovery. It also suggests that external demand is improving which is consistent with data we've seen out of the US and the eurozone in recent months," he said.However, data from Japan was less cheery. The Bank of Japan's quarterly Tankan report showed that a survey of business sentiment amongst manufacturers dropped to -12 in the three months to December, from -3 the previous quarter.Weighing on sentiment this morning was last night's announcement by Standard & Poor's that it had downgraded its outlook for the UK economy to 'negative', meaning that there is a "one-in-three chance that we could lower the ratings in the next two years", according to the agency. "The pound slipped initially, particularly against the euro, however the agencies aren't really telling us anything we don't already know and the reaction is likely to be fairly muted as far as the markets are concerned," said market analyst Michael Hewson from CMC Markets before the open this morning.Stocks fell yesterday after US House Speaker John Boehner attacked the Obama administration, saying that the White House is not serious about cutting spending to avert the 'fiscal cliff'.FTSE 100: ENRC leads resources lowerMiners and oil producers were ignoring the positive Chinese data this morning, with a host of blue-chip resource stocks in the red.ENRC was a heavy faller after UBS downgraded its rating for the stock from 'buy' to 'neutral', saying it sees an "increasing risk of financial stress in 2013". The broker has slashed its target price for the shares from 680p to 270p. UBS also cut its recommendation for Anglo American to 'neutral'.Oil giant BP was lower after Credit Suisse lowered its rating from 'outperform' to 'neutral', citing the stock's valuation and "lack of near-term momentum". Sector peer Tullow was also down.In contrast, distribution and outsourcing group Bunzl was lifted by Citigroup which raised its rating to 'buy', while technology titan Smiths Group gained after an upgrade from Credit Suisse to 'outperform'.Security firm G4S was flat after announcing that it is to acquire an 87% stake in South African retail cash solutions technology provider Deposita for £8.2m.FTSE 250: Centamin rebounds but mining still suspendedGold miner Centamin rebounded strongly after saying that the fuel supply to its Sukari mine in Egypt has resumed, after the Egyptian General Petroleum Corporation went back on yesterday's decision to hit the gold miner with a retrospective payment claim. However, issues with delayed gold exports still mean that the miner's Sukari project continues to be suspended.bwin.party digital entertainment, the online gambling group, gained after saying that Belgian authorities have dropped all legal disputes with the company after it entered into a collaboration agreement with French casino operator Partouche.Market operator London Stock Exchange advanced after its acquisition of a majority stake in LCH.Clearnet was given clearance from the Office of Fair Trading. The company is still waiting for the approval from the FSA.Insurance group Beazley fell after revealing that its preliminary loss estimate for the impact of Superstorm Sandy would be $90m, based on market losses of around $20bn.FTSE 100 - RisersCroda International (CRDA) 2,389.00p +1.92%Burberry Group (BRBY) 1,282.00p +1.58%Wolseley (WOS) 2,865.00p +1.49%Randgold Resources Ltd. (RRS) 6,295.00p +1.21%British Sky Broadcasting Group (BSY) 768.50p +0.99%Experian (EXPN) 1,008.00p +0.90%Smiths Group (SMIN) 1,155.00p +0.87%United Utilities Group (UU.) 707.00p +0.86%Resolution Ltd. (RSL) 250.00p +0.85%Bunzl (BNZL) 1,068.00p +0.85%FTSE 100 - FallersAstraZeneca (AZN) 2,905.00p -1.81%Anglo American (AAL) 1,823.50p -1.80%Prudential (PRU) 886.50p -1.34%National Grid (NG.) 710.50p -0.98%Legal & General Group (LGEN) 145.40p -0.82%Tullow Oil (TLW) 1,206.00p -0.82%Eurasian Natural Resources Corp. (ENRC) 268.10p -0.81%Admiral Group (ADM) 1,144.00p -0.78%Weir Group (WEIR) 1,823.00p -0.71%BG Group (BG.) 1,040.50p -0.62%FTSE 250 - RisersCentamin (DI) (CEY) 35.16p +26.93%Ocado Group (OCDO) 80.95p +5.82%Michael Page International (MPI) 399.50p +3.26%London Stock Exchange Group (LSE) 1,040.00p +2.97%Fidelity China Special Situations (FCSS) 82.20p +2.88%Kenmare Resources (KMR) 30.85p +2.66%Home Retail Group (HOME) 129.00p +2.63%Barratt Developments (BDEV) 203.70p +2.52%Filtrona PLC (FLTR) 578.00p +2.39%Carpetright (CPR) 690.00p +2.30%FTSE 250 - FallersParagon Group Of Companies (PAG) 255.60p -2.44%Synthomer (SYNT) 187.70p -2.24%Sports Direct International (SPD) 377.80p -2.17%Lancashire Holdings (LRE) 773.00p -2.15%Renishaw (RSW) 1,922.00p -2.09%Ruspetro (RPO) 86.70p -1.81%Jupiter Fund Management (JUP) 269.50p -1.75%Petra Diamonds Ltd.(DI) (PDL) 106.40p -1.39%Phoenix Group Holdings (DI) (PHNX) 530.50p -1.39%Intermediate Capital Group (ICP) 309.90p -1.37%BC