Market update: UK manufacturing sector recovers – 06.08.2013

US stocks dipped on Monday (S&P 500 -0.2%, Dow Jones -0.3%) on a day of thin trading volumes. Technology stocks performed comparatively better than other sectors, with Apple and Facebook making gains. The decision by the US government to overrule a ban on sales of some older models of the iPhone and iPad drove the rally in Apple’s shares. In other news, the Institute for Supply Management’s services sector gauge rose from 52.2 in June to 56 in July as new orders accelerated (a reading above 50 indicates expansion). However, the exports index fell from 49.5 to 47.5, as overseas demand remains weak.

In Asia Pacific news, Australia cut its main interest rate by 25bps to a record low 2.5% to stimulate activity in its non-mining industries. In Hong Kong, the Hang Seng fell today as HSBC, the largest constituent in the index reported lower-than-forecast first half pre-tax profits of $14.1bn.

This morning the FTSE Eurofirst 300 is up 0.2% while the FTSE 100 is down 0.1%. Continuing the recent run of more positive economic data, the Office for National Statistics announced that June UK manufacturing output grew by 1.9%. This means manufacturing output grew by 0.7% in the second quarter compared with a contraction in the previous quarter.