9th Nov 2015 08:35
LONDON (Alliance News) - Shares in London opened broadly higher Monday, following weak trade figures released by China over the weekend that lifted expectations of new monetary policy stimulus from the People's Bank of China.
Asia-related stocks HSBC Holdings, Standard Chartered and Aberdeen Asset Management led the blue-chip gainers, up 1.8%, 1.7% and 1.4%, respectively.
The FTSE 100 index opened up 0.3% at 6,375.01 points, the FTSE 250 was up 0.4% at 17,235.79 and the AIM All-Share was up 0.1% at 747.35.
China's exports fell for the fourth straight month in October providing little support to economic growth, while imports plunged on weak domestic demand.
Exports decreased 6.9% year-on-year in October, bigger than a 3.7% fall seen in September, data published by the General Administration of Customs showed Sunday. Imports plunged 18.8% from last year. Economists had expected a decrease of 15.2% after an annual 20.4% decline in September.
Consequently, the trade surplus widened to a record USD61.6 billion from USD60.3 billion in September. Nonetheless, it was slightly below the expected level of USD62 billion.
"This suggests that it seems likely that at some point Chinese authorities may have to take further steps to ease policy further, with potentially another move in the US dollar peg likely in the coming weeks, and months," said CMC Markets chief market analyst Michael Hewson.
Oanda analyst Craig Erlam believes that, while the possibility of more stimulus from the PBoC on the back of the data could be enough to keep investors happy, he said he is sure "this will be tested more than enough this week with inflation, industrial production, fixed asset investment and retail sales data all to come."
China's consumer price index is due on Tuesday, while industrial production, fixed asset investment and retail sales are expected on Wednesday.
In Asia on Monday, the Shanghai Composite ended up 1.6%, while the Hang Seng in Hong Kong finished down 0.7%. The Japanese Nikkei 225 index closed up 2.0%.
Unlike for China, German trade data came in better than expected, with exports lifting by 2.6% month-on-month in September, ahead of expectations for a 2.1% increase and after a 5.2% fall in August. Meanwhile, imports rose by 3.6% month-on-month, above estimates for a 0.9% lift and following a 3.2% drop a month earlier.
The DAX 30 in Frankfurt opened down 0.2% and the CAC 40 in Paris was down 0.4%.
Still in the data calendar Monday, November's reading of the eurozone's Sentix Investor Confidence Index is due at 0930 GMT. Later on, the US Labor Market Conditions Index for October is expected at 1500 GMT.
Wall Street ended mixed Friday. The Dow 30 and the Nasdaq Composite finished up 0.3% and 0.4%, respectively, while the S&P 500 ended flat, after a report from the US Labor Department said job growth in the US showed a substantial re-acceleration in the month of October.
The pound was slightly higher against the dollar early Monday, having weakened strongly after the jobs report on Friday. Sterling was at USD1.5076 Monday morning, having stood at USD1.5070 at the London close on Friday.
Elsewhere on the London Stock Exchange, National Grid was up 0.8%, having declined on Friday, after it said it has filed a request with the Massachusetts Department of Public Utilities to update its electricity distribution rates. The company said it is the first time since 2009 that it has filed such a request, which if approved will affect all electricity companies operating in the state.
In the filing, National Grid has requested a USD143.0 million per year rise in electricity delivery revenue to cover increased operating costs and investments that have been made into the electricity network.
The utility also is planning to find a buyer for its regional gas distribution business, Bloomberg reported, citing people familiar with the matter. The company, which runs the UK's power grid, is looking for suitors for the assets, which serve nearly 11 million customers and which could be worth up to GBP10.0 billion, the source said.
The business may also be carved into parts or a minority stake may be sold in the whole gas distribution system, the sources added. The sale is expected to kick off early next year.
Inmarsat was up 0.7%. The satellite communications company said it has confirmed a deal with Singapore Airlines for the carrier to deploy its GX Aviation high-speed connectivity service for its long-haul fleet. The first installation of the service is due to take place in the second half of 2016. No financial details on the deployment were disclosed.
Meanwhile, Intercontinental Hotels was down 3.6%. Following recent market speculation, the group said that it was not considering a potential sale or merger of the company. On Friday, Bloomberg reported that IHG was exploring strategic options including a potential sale or merger after attracting interest amid a boom in lodging deals.
By Daniel Ruiz; [email protected]
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