14th Mar 2016 12:19
LONDON (Alliance News) - Stocks in the UK were posting modest gains midday Monday, helped higher by miners, which were amongst the best performers in the FTSE 100, as investors overlooked weak Chinese data.
On the AIM market in London, GW Pharmaceuticals' share price more than doubled, lifting the entire AIM All-Share index with it, after reporting positive test results.
The FTSE 100 was up 0.4%, or 27.82 points, to 6,167.61. The FTSE 250 was up 0.6% to 16,695.01 and the AIM All-Share was up 1.5% to 712.76.
The CAC 40 in Paris was up 0.6%, while the DAX 30 outperformed, up 1.5%.
Ahead of the open on Wall Street, futures pointed the Dow 30 down 0.1% and the S&P 500 and Nasdaq 100 down 0.2%.
Blue-chip miners were helping to provide the uplift for the FTSE 100, with Anglo American up 5.3% and Glencore up 5.2%. Jasper Lawler, market analyst at CMC Markets, said investors were brushing past weak Chinese data as the yuan remained near its strongest level against the dollar this year.
Data over the weekend showed China's industrial production grew at the slowest pace since the financial crisis, and retail sales rose at a slower pace at the start of the year, adding pressure on policymakers to roll out new measures to spur economic activity.
Industrial production expanded 5.4% year-on-year in January and February, which was slower than the 5.9% increase seen in December, data published by the National Bureau of Statistics showed. This was the weakest growth since late 2008. Economists had forecast 5.6% annual growth for January and February.
Retail sales growth for the first two months of 2016 came in at 10.2% compared to 11.1% growth registered in December. The increase was slower than the consensus estimate of 11% growth and was the slowest since May 2015.
On Saturday, the head of the country's securities regulator said China will not relaunch the "circuit breaker" mechanism in its stock markets in the next several years. The China Securities Regulatory Commission was widely mocked for introducing the mechanism, which halted nationwide trading twice during its first week in place in early January and sent shockwaves through world markets.
It had "failed due to lack of acknowledgement of the make-up of investors, in which smaller investors are main players," Liu Shiyu told reporters.
Also Saturday, the governor of the People's Bank of China said the country can achieve its recently set economic growth targets for this year and until 2020 without further monetary stimulus. "China will stick to a prudent monetary policy," Zhou Xiaochuan told reporters on the sidelines of the annual parliament session in Beijing. Zhou said the focus should be on creating growth without employing extra monetary measures.
IG Group's market analyst Alastair McCaig said the confirmation that China is set to return to its policy of infrastructure spending and equity market support has helped markets start the week positively.
In Asia on Monday, the Japanese Nikkei 225 index closed up 1.7%, while in China, the Shanghai Composite ended up 1.8%. The Hang Seng index in Hong Kong finished up 1.2%.
Elsewhere in the London stock market, broker downgrades were responsible for the biggest fallers in both the FTSE 100 and FTSE 250. Insurer Admiral Group was the worst blue-chip performer down 2.4% after it was downgraded to Underperform from Neutral by Merrill Lynch and to Hold from Buy by HSBC, according to traders.
In the mid-cap index, transport company Stagecoach was down 6.6%, after it was downgraded to Reduce from Hold by HSBC.
FTSE 100-listed hotels operator InterContinental Hotels Group was one of the best performers in the FTSE 100, up 3.8%, as more merger and acquisition news emerged in the hotels sector.
Starwood Hotels & Resorts Worldwide said it received a non-binding proposal from a consortium of companies to acquire all of the outstanding shares of common stock of Starwood for USD76.00 per share in cash.
On November 16 last year, Starwood entered into a definitive merger agreement with Marriott International under which Marriott would acquire Starwood in a stock and cash transaction. Starwood has received a waiver from Marriott enabling it to engage in discussions with, and provide diligence information to, the consortium in connection with its proposal.
NMC Health was the best FTSE 250 performer, up 4.8%. The private hospital group gave a positive outlook for the year ahead, expecting strong growth from its enlarged network, as it reported a rise in pretax profit for 2015.
The company said that it expects a good year for the UAE economy in 2016, supported by a reasonable gross domestic product growth of around 3% despite lower oil prices, based on forecasts from rating agencies.
For NMC more specifically, the company expects growth to be driven by the ongoing adoption of mandatory healthcare insurance in Dubai.
St Mowden Properties Group, up 3.9%, was benefiting from an upgrade to Buy from Hold by Liberum. The broker said the uncertainty surrounding the New Covent Garden Market scheme in south London has been excessive.
Russia-focused property investment group Raven Russia said it was continuing to "batten down the hatches" as it suffered from the downturn in the Russian economy caused by western sanctions imposed on the country and other economic problems.
The Russian market has been under significant pressure, first due to economic sanctions placed on the country by western powers over Russia's actions in Ukraine, but also due to the sharp decline in the world oil price, a major part of Russia's economy.
Raven made a pretax loss of USD205.1 million in 2015, compared to a loss of USD98.0 million a year earlier, most as a result of the group booking a USD251.2 million loss on the value of its investment portfolio.
The stock was the worst performer in the FTSE All-Share, down 8.2%.
GW Pharmaceuticals reported positive results from a key late stage study of its flagship treatment epidiolex in Dravet syndrome, a rare form of childhood epilepsy.
GW Pharmaceuticals said it achieved its primary endpoint in the study of a "significant reduction" in convulsive seizures compared with a placebo.
Epidiolex has both an orphan drug designation, and a fast designation from the US Food and Drug Administration in the treatment of Dravet syndrome, and is also being assessed in late stage trials for Lennox-Gastaut syndrome, also another rare form of epilepsy, and soon in a third epilepsy indication, Tuberous Sclerosis Complex.
The AIM stock, which also is listed in New York, now has a market capitalisation of GBP1.18 billion.
In European economic news, industrial production in the eurozone rebounded at a faster-than-expected pace in January, data from Eurostat revealed. Industrial production grew 2.1% month-on-month, reversing a 0.5% fall in December. Economists had forecast a 1.7% rise for January.
On a yearly basis, industrial output expanded 2.8%, following a 0.1% drop in the prior month. The pace of growth was faster than the expected 1.6%.
By Neil Thakrar; [email protected]; @NeilThakrar1
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