UK Market News

LONDON (ShareCast) - Resource stocks lead the market higher after the second half of the year got off to a good start following better than expected factory output data. The CIPS/Markit manufacturing purchasing managers' index rose to 47 in June from 45.4 the month before and a gloomy 34.9 in February.

Most of the top ten gains by Footsie (news) constituents are recorded by miners, with Vedanta, ENRC, Xstrata (LSE: XTA.L - news) , and Kazakhmys (LSE: KAZ.L - news) the pick of the crop, helped by an acceleration in the growth of China's manufacturing sector in June. Latin America-focused miner Hochschild is one of the best performing FTSE 250 (news) stocks after increasing its ownership in Gold Resource Corporation (GORO.OB - news) , a US OTC traded underground precious metals mining company, to 23.9%.

Oil stocks are also wanted as the oil price continues to edge higher. BG Group (LSE: BG.L - news) is the sector's best performer, but airline British Airways (LSE: BAY.L - news) reacts negatively to the shift in oil price.

Marks and Spencer (LSE: MKS.L - news) 's like-for-like sales fell across its major divisions in the first quarter, though total group sales were up. In the 13-weeks to June, UK like for like sales fell 1.4%, General Merchandise slipped 2.4% and Food was down 0.5%, but the figures were better than feared and the shares are up. Next is higher in sympathy.

Standard Chartered (LSE: STAN.L - news) and ANZ, Australia's fourth-largest lender, are in advanced talks to buy separate parts of Royal Bank of Scotland (LSE: RBS.L - news) 's Asian assets., the Financial Times reports.

Elsewhere in the financial sector property giant Land Securities (LSE: LAND.L - news) nudges up a rung after announcing the sale of Portman House, a retail and office property located on Oxford Street in London, for £115m, but Lloyds Banking (LSE: LLOY.L - news) eases back after Credit Suisse cut its price target for the stock from 55p to 50p. Fellow Swiss bank UBS (Virt-X: UBSN.VX - news) has cooled on home insurance group Homeserve (LSE: HSV.L - news) , cutting its rating from "buy" to "neutral".

Bus and rail group National Express (LSE: NEX.L - news) is the big faller on the day after it handed back the East Coast franchise to the Department for Transport after failing to renegotiate terms. The service will now be nationalised until a new franchisee is found. National Express, which also confirmed the departuure of chief executive Richard Bowker, will not be considered ever again for a franchise, said the government.

Legacy software group Micro Focus (LSE: MCRO.L - news) has upped its cash offer for Borland for a second time to see off a potential rival bidder. Micro Focus is now offering $1.50 cash for each outstanding share of Borland Software Corporation (BORL - news) , which values it, on a fully diluted basis, at approximately $113m.

Energy services provider John Wood Group (LSE: WG.L - news) said performance in the year to date remains in line with expectations. The group said although the oil price has strengthened over recent weeks, market conditions remain broadly similar to those outlined in May.

Oil service firm Hunting (LSE: HTG.L - news) said should current market conditions and commodity prices prevail, trading throughout the remainder of the year will be challenging. Panmure Gordon responded by cutting its price target for the stock from 433p to 400p.

AstraZeneca (LSE: AZN.L - news) has received EU marketing approval for its lung cancer treatment Iressa four years after its was withdrawn from use after disappointing trial data.

Brewing company SABMiller (LSE: SAB.L - news) is to give a 10% stake in its South African subsidiary to agencies representing the black community in South Africa.

Engineer and construction contractor Balfour Beatty (LSE: BBY.L - news) said its joint venture company Gammon Construction has won a contract for the redevelopment of the Hennessy Centre in Hong Kong.

Morgan Sindall (LSE: MGNS.L - news) , the construction and regeneration company, said it is on course to meet management's expectations for the full year, despite continued tough trading conditions in some of its markets.

The share price of industrial conglomerate Lupus Capital (Berlin: LUO.BE - news) is ripped to shreds after the company announced the departure of legendary wheeler-dealer Greg Hutchings, who has been executive chairman of the company since 2004. The company has refinanced its banking facilities, albeit at a higher interest rate and at the cost of a one-off £7.5m payment to its bankers.