London last week
Pausing for breath after recent gains, London equities came under pressure midweek, with mining stocks hit by concerns that Chinese demand will ease and consumer goods giant Unilever reported sluggish sales growth. Quentin Smith from OMAM reports.
Data from the Confederation of British Industry showed factory orders rising at their fastest pace since April 1995 during the first quarter.
The index of new orders rose to 18 in April from 13 in January as stronger global demand benefits British manufacturers, , while the CBI's measure of optimism remained close to its strongest since April 2002.
Data from the British Bankers' Association showed mortgage approvals increasing in number and value in March from a year ago, suggesting that higher interest rates have yet to curbed demand for mortgages.
The number of approved mortgages rose 34% to 97,852 in March, while the value surged 71% to £10.7bn. The BBA commented that new mortgage lending is returning to the levels seen in the second half of last year and looks likely to remain buoyant in the near term.
Over the week the All-Share, FTSE 100, midcaps and smallcaps all lost between 1% and 2%, with telecoms heading the sector performers on positive sector news and mining the laggard area on concerns over slowing Chinese demand.
Fund management group Amvescap (-6.8% to 380¼p) reported a first-quarter profit of £9.1m, buoyed by rising stock markets and cost reductions, against a loss of £4.7m a year earlier.
The company expects to be able to build business momentum through 2004, although it has suffered as investors have withdrawn funds amid a regulatory investigation of improper trading and concerns about investment performance.
The market is closed on Monday of this week for the May Bank Holiday. Key economic announcements during the week include the release of Purchasing Managers Institute data on the service and manufacturing sectors, both of which are expected to be consistent with recent growth patterns.
The monthly meeting of the Bank of England's Monetary Policy Committee also takes place, which is widely expected to produce a further quarter point rise in benchmark lending rates, given the strength of recent data.
