Spreadex Market Update
Brexit-impacted construction PMI causes FTSE’s early gains peter out
Coming in far worse than expected at 46.0, the lowest reading since September 2009, the latest construction PMI seems to portend what the kind of data the UK can expect in the coming months. It’s the first concrete, non-market related sign that the Brexit (at least the run-up to the referendum) has done some economic damage to the UK, and has caused the FTSE’s early gains to peter out, the index dipping back to 6570. The main drag post-construction PMI came from the property sector, with Persimmon (which updates investors tomorrow), Rightmove and Berkeley Group Holdings among the worst performing stocks.
The situation was similar over in the Eurozone, with both the DAX and CAC falling by around 0.1-0.2%. The region joined the UK with an awful morning for data, the Sentix investor confidence figure plunging to 1.7 (from8.1 expected and 9.9 last month), a year and a half nadir.
It’s hard to see the European indices breaking out of this mini-slump this afternoon, especially with the US markets on holiday thanks to Independence Day. Europe has repeatedly shown a capacity to surprise across the past week, however, so a late in the day surge can’t quite be ruled out just yet.
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