European markets edged lower in early trade on Thursday amidst mixed data on the European service sector and a drop in the price of oil. Strong results from insurer Admiral Group, asset manager Schroders and building materials supplier Travis Perkins as well a good performance from mining shares helped UK indices outperform continental peers.
Italy and Germany saw slight improvements in service sector PMIs while France saw a surprise decline further into contraction. The biggest shock came from a big slide in the UK service sector which fell to 52.7 in February, the lowest since March 2013. A figure of 55.1 was expected after a reading of 55.6 in January. The slide in the service sector makes for an unhappy trifecta of weak UK purchasing manager surveys for February, with manufacturing and construction PMIs having also missed expectations.
The basic materials sector led gains on the FTSE 100 helped by a breakout to a 3 ½ month high in the price of copper. Admiral Group was top riser after the insurance group reported a 6% rise in pre-tax profits in 2015. Travis Perkins shares rose as investors looked through impairments in its plumbing business and focused on the 5.5% rise in adjusted pre-tax profits in 2015. Housebuilders are amongst the top fallers on the day with Persimmon propping up the FTSE.
US markets look set for a mixed open with a weaker oil price taking the edge off the highest close since January 6 for the Dow Jones Industrial Average. Investors are starting to get twitchy before Friday’s jobs numbers.
USA pre-opening levels
S&P 500: 1 point lower at 1,985
Dow Jones: 6 points higher at 16,895
Nasdaq 100: 1 point higher at 4,335
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