U.K.’s FTSE 100 Advances After PMI Plunge Spurs Stimulus Betsby
The U.K.’s FTSE 100 Index reversed earlier declines after a plunge in business activity post-Brexit spurred speculation the Bank of England will loosen policy.
The benchmark rose 0.5 percent at the close in London, erasing a slide of as much as 0.5 percent. The pound slid after Markit Economics data showed a Purchasing Managers’ Index combining flash estimates of services and manufacturing slumped to a 2009 low of 47.7 in July, below the 50 level dividing expansion from contraction.
For Bank of England officials seeking signs the U.K.’s vote to leave the European Union will hurt the economy before they consider boosting measures, the report “could provide the smoking gun they have been looking for,” Joshua Mahony, a market analyst at IG in London, wrote in a note.
The FTSE 250 Index of midcaps with more domestic exposure slipped 0.4 percent, while Ireland’s ISEQ Index also fell.
Among shares active on corporate news, Vodafone Group Plc gained 4.6 percent after its quarterly service revenue beat estimates. Marks & Spencer Group Plc slipped 3.6 percent after Barclays Plc downgraded the shares to the equivalent of sell, saying retailers may have to adapt to a backdrop of recession in the U.K. after the country’s vote to leave the European Union.
The FTSE 100 is up 0.9 percent this week, capping its longest stretch of gains since November 2014.