U.K. stocks tumbled to a six-month low as the nation’s manufacturing shrank at the fastest pace since 2009 while Chinese factory output and U.S. payrolls missed economists’ forecasts.
Aquarius Platinum Ltd. sank 12 percent to the lowest since 2005 after Goldman Sachs Group Inc. cut its price estimate on the shares. Croda International Plc and IMI Plc slid more than 2.5 percent. BP Plc rose 1.8 percent after saying it will attempt to sell its 50 percent holding in TNK-BP.
The benchmark FTSE 100 fell 60.67 points, or 1.1 percent, to 5,260.19 at the close in London, the lowest since Nov. 25. The FTSE All-Share Index decreased 1.2 percent today and Ireland’s ISEQ Index slid 2.4 percent. Stocks extended losses after a report showed U.S. employers added the smallest number of workers in a year last month.
“This is a terrible figure and this undoubtedly raises expectations of an intervention from the Federal Reserve in the form of quantitative easing,” said Stephane Ekolo, chief European strategist at Market Securities in London. “That said, if we need to solely rely on central banks to get any better, that somehow demonstrates how deeply our economies and markets are ill.”
U.S. payrolls climbed by 69,000 last month, less than the most-pessimistic forecast in a Bloomberg survey, after a revised 77,000 gain in April that was smaller than initially estimated, Labor Department figures showed. The median economist estimate called for a 150,000 May advance. The jobless rate rose to 8.2 percent from 8.1 percent.
The FTSE 100 has fallen 1.7 percent this week, bringing the drop from this year’s high in March to 12 percent, amid concern that Greece will be forced to leave the euro area.
U.K. manufacturing shrank last month at the fastest pace since the depths of the financial crisis in May 2009 as demand plunged. A gauge of factory output, based on a survey by Markit Economics and the Chartered Institute of Purchasing and Supply, dropped to 45.9 from 50.2 in April. The median forecast of 30 economists in a Bloomberg survey was for a decline to 49.7. A reading below 50 indicates contraction.
The U.K. economy will almost stagnate this year and the government needs to support the recovery with fiscal-stimulus measures, the British Chambers of Commerce said. Gross domestic product will probably rise 0.1 percent this year as the euro area’s sovereign-debt crisis crimps demand, the London-based group said. It had forecast growth of 0.6 percent.
In China, a purchasing managers’ index fell to 50.4 in May from 53.3 in April, China’s statistics bureau and logistics federation said today. That compared with the 52 median estimate in a Bloomberg survey of economists.
Aquarius Platinum, an Australian producer of the metal in southern Africa, plunged 12 percent to 64.8 pence in London, the lowest since January 2005. Goldman Sachs cut its estimate for the Sydney-listed shares by 34 percent to A$1.55, citing concern over cash generation.
Companies most dependent on economic growth led losses in the FTSE 100. Croda, the world’s second-largest maker of cosmetic ingredients, declined 2.6 percent to 2,179 pence. IMI, the world’s biggest maker of pneumatic controls, dropped 4.4 percent to 846.5 pence. Johnson Matthey Plc, the pollution control specialist that makes a third of all autocatalysts, fell 3.3 percent to 2,100 pence.
BP, Europe’s second-biggest oil company, increased 1.8 percent to 402 pence. BP’s billionaire partners in TNK-BP, Russia’s third-largest oil producer, made an indicative proposal about a month ago to buy the U.K. company’s 50 percent holding. Alfa-Access-Renova, the group that represents BP’s partners, “sent indicative terms for a deal, which are still on the table for discussion,” said Stan Polovets, AAR’s chief executive officer.
Harvey Nash Group Plc surged 7.3 percent to 51.5 pence, its largest rally since February. The recruitment company said first-quarter revenue rose 18 percent and gross profit climbed 6 percent. The company reported greater growth in the U.S. than in the U.K. and Europe.
Yell Group Plc, the publisher of U.K. yellow pages directories, jumped 25 percent to 1.58 pence after dropping 61 percent over nine consecutive days. The company on May 22 said that it hired Goldman Sachs and Greenhill & Co. as advisers to help it establish a new capital structure.