London markets catch a case of Europe growth flu

London markets sank along with their European peers as the latest eurozone purchasing managers index (PMI) figures signaled a broad-based slowdown on the continent.

Sterling strength, notably against the euro, also drove down equities, given many U.K. companies derive part of their revenue from foreign currencies.

How did markets perform?

In the U.K., the FTSE 100 UKX, -1.56%  was down 1.4% to 7,248.39 on Friday, reversing the gain Thursday of 0.9%.

The pound GBPUSD, +0.6485%   rose 0.7% to $1.3196, after ending Thursday nearly flat at $1.3072. And one euro EURGBP, -1.2679%  was buying 0.8569 pounds, down 1.3%.

What’s moving the markets?

The flash PMI figures for the eurozone in March came in below expectations, and the individual numbers for Germany and France were revealing. The preliminary Markit PMI Composite figure, seasonally adjusted, was 51.3, below both analysts’ predictions of 52 and the February figure of 51.9.

At a pivotal European Council summit where meetings overran dramatically, the European Union offered the U.K. a two-pronged plan to extend Brexit beyond the March 29 deadline. The U.K. will be offered a delay until May 22, if MPs approve the deal Prime Minister Theresa May had negotiated. If not, the EU will support a shorter delay, to April 12, to formulate a new plan. But with PMIs dominating, drivers such as Brexit had little impact.

Which stocks are active?

Banks and energy companies were among the biggest losers. HSBC Holdings PLC HSBA, -2.14% HSBC, -1.06% HSBC, -1.06% fell 2.7% and Royal Dutch Shell Group PLC Total SA FP, -1.51% TOT, -2.06%  tumbled over 3% as oil prices fell.

Moody’s downgraded the paper and packaging sector’s credit rating to negative from stable, hitting Smurfit Kappa Group PLC SKG, -4.20%   to the tune of 2.8%, Mondi PLC MNDI, -3.13%   dropping 2.9% and DS Smith PLC SMDS, -3.53% falling 3.7%. 

Engineering company Smiths Group PLC SMIN, +1.00%  announced plans to spin off its Smiths Medical business while delivering its first-half 2019 earnings, sending the shares higher by 1.8%.

Mobile power generation company Aggreko PLC ARGKF, +4.08%  gained after issuing its annual report, confirming figures from its preliminary full year results in early March showing it beating its own guidance. It rose 4.3%.

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