UK shares dropped the most in more than three weeks, pulled down by commodity manufacturers, as private data showed Chinese factory output grew at a slower rate than expected last month.
Losers included BHP Billiton Ltd, the biggest mining firm in the world, slid 0.9% to 2,011.5 pence. Glencore Plc lost 1.1% to 356.2 pence while Rio Tinto Group plunged 1.1% to 3,354.5 pence. Schroders Plc declined 2.6%. IAG SA climbed 2.2% as its profits topped projections. Smith & Nephew Plc added 3.8% after revenue for the maker of medical devices beat estimates, Bloomberg reported.
The FTSE 100 Index declined 50.93 points or 0.8%, to 6,679.18 at close of trading in London, stretching its losses this week to 1.8%. The benchmark measure reduced earlier losses by as much as 1.6% after US Labor Department data showed payrolls added 200,000 jobs for the sixth month in a row. The Broader FTSE All-Share Index plunged 0.7%, while Ireland’s ISEQ Index reversed 0.7%.
A gauge of manufacturing activity in China measured by HSBC Holdings Plc added 51.7 in July, falling short of the median economist projection of 52.
UK manufacturing advanced at the slowest rate in a year, a Markit Economics report indicated. The PMI reversed to 55.4 in July, falling short of the median economist projection of 57.2.
Marcus Bullus of MB Capital told Reuters he would reinvest in the FTSE if the gauge bounced back to surge beyond its exponential moving average level for the past 200 days. The level currently stands at 6,686 and can be utilized by technical traders as a green light to buy if a gauge soars above the point.
“I don’t want to call the bottom here because you could get burnt badly, but if we see a day or two of buyers moving the market back higher, I could get back in,” Bullus is quoted by Reuters as saying.
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