Strong manufacturing data and good showing from financials drive the FTSE and DOW higher

The Institute for Supply Management’s manufacturing index rose to 54.8% last month from 53.4% in March versus estimates of 53.3% gave US stocks a good boost. The Dow Industrials are up 114 to 13,328 despite Chinese PMI data which came in slightly light of expectations.

The FTSE 100 rose 75 points to 5,812 despite disappointing results from BP and Man Group, as financial stocks particularly did well on positively received results from Lloyds.

BP’s shares fell 1 percent to 441p as the replacement cost profit metric was down in the first quarter of 2012  to $4.8 billion, from $5.5 billion in same period in 2011. Expectations were for £5.0 billion. Earnings per ordinary share were 25.29 cents, versus 29.25 cents the year before.

To pay compensation payments from the Gulf of Mexico Macondo well disaster the company has the objective of selling $38 billion of assets with around three quarters of this target met to date. This has caused a reduction in production, with first quarter output of 2,452 million barrels of oil equivalent per day, down 6 percent year on year.

Capital expenditure was also significantly higher at $5.44 billion, compared with the $3.7billion spent in the first quarter of 2011.

Man Group dropped 5.5 percent to 98p, close to its 52 week low of  92p. Funds under management in the first quarter of 2012 were $59 billion, up from the $58.4 billion in the year before quarter, but down $5.5 billion versus September 2011.

The key AHL quant fund’s funds under management fell from $21 billion at the end of 2011 to $19.5 billion, and below the $24.4 billion at the end of September 2011.

Net outflows of funds were around $1 billion, compared with outflows of $2.5 billion in the previous quarter, comprising redemptions of $4.1 billion and additional sales of $3.1 billion.

Strong results from Lloyds Banking Group saw its share rise 8 percent to 34p, helping other banks to the top of the FTSE 100 risers.

Pre-tax profits were £288 million in the first quarter of 2012 compared to a loss of £3.47 billion in the first three months of 2011, but down 9% compared to the £316m it made in Q4 2011.  This fall was partly due to additional provisions relating to the mis-selling of personal protection insurance (PPI) of £375 million in addition to the £3.5 billion already set aside. Bad loans were lessened by around a third compared to the fourth quarter of 2011, at £1.7 billion. 

Contrarian Investor UK