- UK service firms report second month of growth - PMI
- Wood Group climbs after Apollo sweetens bid
- Defensive stocks boost FTSE 100
- FTSE 100 up 0.3%, FTSE 250 off 0.2%
April 5 (Reuters) - UK's benchmark FTSE 100 rose on Wednesday after data showed the dominant service sector in March reported the strongest new business expansion in a year, although worries about a slowdown in the U.S. economy tempered the mood.
The blue-chip FTSE 100 rose 0.3%, outperforming the broader European markets as defensive sectors such as pharmaceuticals and consumer staples rose.
Adding to signs of recovery in the economy, the final reading of the S&P Global/CIPS UK Services Purchasing Managers' Index (PMI) of 52.9 was below February's 53.5 but above the 50 mark denoting growth for a second month in a row.
However, U.S. stock futures slipped after data on Tuesday showed U.S. job openings in February dropped to the lowest level in nearly two years, fuelling concerns about a potential recession.
"Figures on job openings and factory orders are pointing towards a potential recession for the world's largest economy, but the upside might be a pause in interest rates which would typically be a positive for stocks," said Danni Hewson, head of financial analysis at AJ Bell.
U.S. private jobs data due later in the day could offer clues on when the Fed will hit pause on its monetary tightening cycle.
Meanwhile, Bank of England Chief Economist Huw Pill said on Tuesday the central bank still cannot be sure that it has raised interest rates enough to tame inflation. Financial markets see a 70% chance of another 25-bps rate hike in May when the central bank meets next.
The domestically focussed FTSE 250 index slipped 0.2%, with industrial firms and homebuilders leading losses.
Direct Line climbed 6% after Citigroup double upgraded the motor insurer's stock to "buy", saying there's sufficient liquidity to avoid equity raise and the motor pricing cycle has bottomed out.
John Wood Group jumped 4% after private equity firm Apollo Management made what it said was a final offer to buy the oilfield services and engineering firm for 1.66 billion pounds ($2.1 billion) in cash.
Reporting by Sruthi Shankar in Bengaluru; Editing by Nivedita Bhattacharjee and Shailesh Kuber
Source: Reuters