LONDON (ShareCast) - Strong gains from mining stocks and an impressive first-quarter performance from UK lender Lloyds helped UK markets to rise on Friday, as investors shrugged off mostly worse-than-expected economic data.
"With Europe mostly out of action for May Day, it was a quiet day in London, but at least the traditionally weak period for equities has started off on the right foot," said Chris Beauchamp from IG.
The FTSE 100 finished 25.32 points higher (+0.36%) at 6,985.95, after clawing back earlier losses which sent it to an intraday low of 6,919.39.
Stocks received an extra boost in afternoon trade after Wall Street equities opened positively, rebounding after a sharp drop the previous session.
In economic data, the UK manufacturing purchasing managers' index (PMI) unexpectedly dropped to 51.9 in April from a revised 54 in March, surprising analysts who expected an increase to 54.6. This was the lowest rate of growth (measured by figures over 50) since September 2014.
"This is a disappointing survey that adds to the evidence that the economy has recently lost momentum," said economist Howard Archer from IHS Global Insight.
Elsewhere, the official Chinese manufacturing PMI remained unchanged at 50.1 in April, while the non-manufacturing PMI declined from 53.7 to 53.4.
Meanwhile, two separate US manufacturing PMIs disappointed: the final reading of Markit's April manufacturing PMI was revised from 54.2 to 54.1, while the ISM manufacturing index unexpectedly remained unchanged at 52.
One bright spark on the macro front was from Britain where UK lending figures came in strong, with consumer credit growth of £1.2bn in March. This was a surprise increase from £0.8bn the previous month and the strongest rate of growth since 2006.
Lloyds and mining stocks surge
Lloyds saw shares jump over 7% after the bank delivered a bigger-than-forecast 21% increase in underlying profits in the first quarter as impairment charges more than halved. The UK lender also lifted its net interest margin guidance for the full year and improved its capital position.
However, sector peer Barclays was extending losses after disappointing on Wednesday with its own results. Berenberg lowered its rating on the stock to 'sell' on Friday.
Mining stocks surged as PMI data from China showed that growth remained tepid, raising hopes for further stimulus from Beijing to boost the world's top metals user. Anglo American, Rio Tinto and BHP Billiton all rose at least 3%.
Insurers Admiral and Esure were in demand after Barclays Capital lifted its ratings on the stocks to 'equal weight' and 'overweight' respectively.
However, other financials were providing a drag, such as Aberdeen Asset Management, Hargreaves Lansdown and 3i Group.
Market Movers
techMARK 3,192.66 +0.19%
FTSE 100 6,985.95 +0.36%
FTSE 250 17,468.27 -0.04%
FTSE 100 - Risers
Lloyds Banking Group (LLOY) 82.87p +7.09%
Anglo American (AAL) 1,165.00p +5.43%
Rio Tinto (RIO) 2,997.00p +3.88%
BHP Billiton (BLT) 1,607.50p +2.98%
Admiral Group (ADM) 1,596.00p +2.44%
Reed Elsevier (REL) 1,108.00p +2.40%
Smith & Nephew (SN.) 1,143.00p +2.33%
International Consolidated Airlines Group SA (CDI) (IAG) 557.50p +2.29%
Ashtead Group (AHT) 1,147.00p +1.86%
Capita (CPI) 1,165.00p +1.84%
FTSE 100 - Fallers
Aberdeen Asset Management (ADN) 463.10p -2.53%
Hargreaves Lansdown (HL.) 1,199.00p -2.52%
Severn Trent (SVT) 2,084.00p -1.93%
TUI AG Reg Shs (DI) (TUI) 1,200.00p -1.88%
3i Group (III) 497.90p -1.70%
Land Securities Group (LAND) 1,229.00p -1.60%
Dixons Carphone (DC.) 418.10p -1.46%
United Utilities Group (UU.) 958.00p -1.34%
British Land Company (BLND) 821.50p -1.32%
Intu Properties (INTU) 338.90p -1.20%
FTSE 250 - Risers
Vedanta Resources (VED) 656.50p +4.46%
esure Group (ESUR) 227.70p +4.35%
IP Group (IPO) 205.10p +4.11%
Rank Group (RNK) 195.50p +2.36%
Soco International (SIA) 185.50p +2.26%
Centamin (DI) (CEY) 64.90p +2.20%
Essentra (ESNT) 982.00p +2.19%
Spire Healthcare Group (SPI) 326.60p +1.90%
Aveva Group (AVV) 1,722.00p +1.83%
Saga (SAGA) 196.60p +1.81%
FTSE 250 - Fallers
RPS Group (RPS) 204.70p -3.90%
AL Noor Hospitals Group (ANH) 870.00p -3.12%
Greggs (GRG) 1,156.00p -2.78%
Allied Minds (ALM) 635.00p -2.76%
Jardine Lloyd Thompson Group (JLT) 1,034.00p -2.73%
AO World (AO.) 181.50p -2.68%
Countrywide (CWD) 511.50p -2.57%
Supergroup (SGP) 1,004.00p -2.52%
Home Retail Group (HOME) 163.00p -2.34%
Serco Group (SRP) 130.50p -2.32%
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