9th May 2016 11:10
LONDON (Alliance News) - Stocks in London were higher Monday midday, but weakness in miners was limiting gains by the FTSE 100, with seven of them sitting at the bottom of the blue-chip index following weak trade data from China.
The FTSE 100 was up 0.5%, or 31.01 points, at 6,156.72 at midday. Anglo American, Rio Tinto, Glencore, Antofagasta, Fresnillo, BHP Billiton and Randgold Resources were off as much as 6%.
China's exports decreased unexpectedly in April after rising sharply in the previous month, and imports fell at a faster-than-expected pace. Exports declined 1.8% year-over-year in April, while they were expected to remain flat. Imports plunged 10.9% in April from a year ago, much faster than the 4.0% fall expected by economists.
The visible trade surplus of the country came in at USD45.56 billion in April, which was above the expected surplus of USD40.00 billion.
In China, the Shanghai Composite ended down 2.8%, while the Hang Seng index in Hong Kong added 0.2%. In Tokyo, the Nikkei 225 index rose 0.7%
Mining stocks also were hurt by a fall in iron ore futures, following a rally which analysts at Shore Capital believe was driven by speculation.
"We had warned that the recent rally in metal prices was driven by speculation and overdone, resulting in premature calls for a commodities 'bottom'. Our expectation was that poor Chinese economic data could be expected over the coming months," noted Shore analyst Yuen Low.
Elsewhere in the FTSE 100, shares in easyJet were up 2.6%, following a double upgrade by RBC Capital to Outperform from Underperform. The budget airline was taking back the losses from Friday, when the stock lost 1.7% after easyJet reported growth in passenger numbers in April year-on-year, but a decline in load factor.
Smith & Nephew was trading up 2.3% on a broker rating upgrade. Jefferies lifted its recommendation on the medical devices maker to Buy from Hold. Analysts at Berenberg also expressed confidence on Smith and Nephew by leaving their recommendation unchanged at Buy, saying that the stock "still looks attractive".
Inmarsat was among the best blue-chip performers, up 2.1% at 829.50 pence. The stock was recovering some ground following their sharp decline after the satellite communications company revised down its 2016 revenue guidance on Thursday. Before the open Monday, the shares were down 13% since Thursday. On Friday, they touched a low of 798.50p, their lowest level since early 2015.
The FTSE 250 index was up 0.6% at 16,745.95 and the AIM All-Share index up 0.4% at 725.42.
FTSE 250 security services and outsourcing company G4S was up 6.1%, the best mid-cap performer, after issuing a reassuring trading update showing growth in revenue in the first quarter and no new provisions booked on onerous contracts.
Ashley Almanza, the chief executive, said G4S performed well in the first quarter against a backdrop of macroeconomic uncertainty. This, Almanza said, was reflected in revenue in the first quarter to the end of March growing to GBP1.51 billion from GBP1.44 billion in continuing businesses.
Greggs was up 3.9%. The bakery and food-to-go retailer pleased the market with another positive trading update as it continues to grow sales on the back of its refreshed and healthier product offering. Greggs noted that conditions on the UK high street were softer in March but recovered in recent weeks.
Beazley was up 2.2% after Bernstein upgraded the insurer to Outperform from Market Perform.
Interserve was down 5.7%, adding to the 16% loss suffered on Friday. JPMorgan, Jefferies and Berenberg cut their price targets on the support services and construction company's shares, reflecting the group's announcement on Friday of an increase in its net debt expectations following further deterioration in the support service group's UK construction division.
Dignity was down 2.0%. The funeral services provider said trading in the first quarter was in line with its expectations as the number of deaths in the UK fell as anticipated. The company said revenue for the 13 weeks to March 25 was GBP81.2 million, compared to GBP85.5 million a year earlier. Underlying operating profit, which strips out one-offs, slipped to GBP31.1 million from GBP35.8 million.
Brent oil was at USD46.13 a barrel at midday, compared to USD45.77 at the London equities close on Friday. The North Sea benchmark has risen as wildfire continued to disrupt supplies from Canada's oil sands in Alberta.
"Oil is on the rise again today, although interestingly this is not providing much of a lift to energy stocks early in the session," said Oanda senior market analyst Craig Erlam.
"Prices have been boosted by reports that production in Canada may be off by more than one million barrels per day as a result of the fires in the oil sands region. Given the nature of the fires, there is no way of knowing when production will return to previous levels which could continue to support prices for now," Erlam noted.
The CAC 40 in Paris and the DAX 30 in Frankfurt were up 1.4% and 2.0%, respectively, ahead of the eurogroup meeting of finance ministers from eurozone countries starting at 1400 BST in Brussels.
The eurogroup will discuss the state of play of the first review of the macroeconomic adjustment programme to Greece. It also will discuss "possible debt relief measures aiming at ensuring that Greece's gross financing needs remain at a sustainable level", with a view to reach a political agreement.
The Greek Parliament passed the ruling coalition's latest reform package including pension cuts and income tax hikes, amid clashes late Sunday on nearby Athens streets between police and rioters opposed to the austerity measures.
European indices were boosted by data from Sentix showing that eurozone investor confidence improved to a four-month high in May. The investor sentiment index rose to 6.2 in May from 5.7 in April. This was the highest reading since January, when the score was 9.6. The reading was forecast to rise to 6.0.
Stocks in New York were expected to track the gains seen in Europe, with the Dow 30, the S&P 500 and the Nasdaq 100 all seen up 0.3%.
Still in the economic calendar, US the labor market conditions index is due at 1500 BST.
By Daniel Ruiz; [email protected]
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