UK Manufacturing Activity Improves, Phoenix IT Plunges 36%

Arthi Gupta
03 Sep, 2012
New York City

The UK indexes gained on a rally in resource sector on the hopes of another round of measures from central banks in Europe and in Asia. The UK manufacturing sector downturn eased sharply and Irish manufacturing improved at a slower pace in August.

[R]1:50 PM London – The UK indexes gained on a rally in resource sector on the hopes of another round of measures from central banks in Europe and in Asia. The UK manufacturing sector downturn eased sharply and Irish manufacturing improved at a slower pace in August.[/R]

The UK indexes edged higher after Chinese manufacturing fell to its lowest level in August since March 2009 reviving hopes that central banks will swing into action. The European Central Bank is scheduled to meet on Thursday and expectations ran high for specific steps.

The HSBC Purchasing Managers’ Index declined to 47.6 in August, from 49.3 in July, as exports slowed and demand linked to construction and steel sectors fell.

In London, the benchmark index FTSE 100 gained 42.02 or 0.7% to 5,753.42 and the pound edged higher to $1.5886.

UK Manufacturing Activity Improves

The UK manufacturing sector downturn eased sharply in August, a survey by Markit Economics and the Chartered Institute of Purchasing & Supply showed today.

The seasonally adjusted Markit/CIPS Purchasing Manager’s Index rose to 49.5 in August, from 45.2 in July, a four-month high.

The decline in output was rooted in the investment goods sector. Consumer goods makers’ output rose, while intermediate goods companies saw a marginal return to growth.

Irish Output Slows

Irish manufacturing sector continued to improve in August but at a slower pace than in the previous month, according to data released by Markit Economics and NCB today.

The seasonally adjusted NCB Purchasing Managers’ Index declined to 50.9 in August, from 53.9 in July.

New orders increased for the seventh month in a row.

Gainers & Losers

Resource sector stocks gained on the optimism that central banks in Europe and China will offer new steps to revive economic growths.

BHP Billiton fell 1.2%, Rio Tinto gained 2.1% and Fresnillo soared 3.8%.

Arm Holdings plc, the electronic chips maker fell 2.7% to 558.50 pence after a broker downgrade.

Phoenix IT Group plc plunged 35.9% to 135 pence after the Information technology services provider reported accounting irregularities within its Servo division.

Royal Dutch Shell plc rose 0.8% to 2,221 pence after the oil and gas explorer completed the sale of the Nigerian oil mining lease for $102 million.