2:30PM New York, 7:30PM London – The U.K. manufacturing output falls 1.3% in the quarter to September. Service sector activity declines in October.

London stocks fell 2.3% on a slew of negative government reports that showed the country''s manufacturing output dropped in September and service sector activity declined in October. Commodity stocks also plunged as oil and metal prices plunged.

In London trading FTSE 100 fell 2.3% or 108.77 to 4,530.73.

Of the FTSE 100 index stocks 22 rose, 78 declined, and 2 were unchanged.

U.K. Manufacturing Drops 1.3% in Q3

The Office of National Statistics reported today that manufacturing output declined 1.3% in the three months to September. Output fell in 11 of the 13 sub-sectors.

Output fell 2.6% in electrical and optical equipment industries, 2.3% in transport equipment industries and 1.7% in paper, printing and publishing industries.

However, total production output fell 1.1% in the quarter to September, with output in the mining and quarrying sector declined 0.6% and the energy supply sector declining 0.3%.

In addition, manufacturing output dropped 0.8% in September from a month earlier. Production fell in ten of the 13 sub-sectors.

In the month, transport equipment dipped 1.8%, chemicals and man-made fibre industries declined 1.7% and paper, printing and publishing industries lost 1.3%.

Total production output shed 0.2% in September, with mining and quarrying output increasing 7%.

Oil and gas production increased 9.3% following the end of planned maintenance season.

Service Sector Activity Drop in October

The CIPS/Markit Purchasing Managers'' Index for services eased to 42.4 in October from 46 a month earlier. A reading below 50 reflects contraction. New orders, outstanding business and staff levels fell.

New business dropped to a record low of 40.1 from 45.2 the month ago.

According to the Chartered Institute of Purchasing and Supply the credit market turbulence led to reluctance to commit to contracts, falling spending and postponement of decisions.

Employment also dropped 45.7, while lower fuel costs led the index to 58.1 in October.
Optimism for the future of the sector reached a record low of 50.8 from 58.2.

Gainers & Losers

Royal Bank of Scotland led advancers in the FTSE 100 index shares with a rise of 5.8% followed by increases in Next Plc of 5.7%, in Stagecoach Plc of 5.3%, in Hammerson of 4.9%.

Eurasian Natural led decliners in the FTSE 100 index shares with a fall of 12% followed by losses in Kazakhmys of 10.8%, in Wood Group of 10.3%, in Old Mutual of 9.2%, and Vedanta Resources of 5.9%.

Commodity stocks declined after oil prices dropped below $69 per barrel before the release of the U.S. inventory report.

VOD	$30.10	-0.43%
SNN	$60.17	2.09%
GSK	$52.21	-0.02%
BP	$43.40	1.02%
BCS	$19.93	-0.50%
HBC	$58.61	1.45%
LYG	$3.82	-0.78%

click on symbol for profile