14th Aug 2014 09:54
LONDON (Alliance News) - UK stocks have moved higher, seemingly unaffected by disappointing German, French and Eurozone economic data.
"The FTSE 100 is the solitary island of blue in a sea of red, as GDP figures continue the trend of disappointing French and German economic data," says Alastair McCaig, market analyst at IG.
The FTSE 100 at mid-morning Thursday was 0.1% up at 6,663.64, the FTSE 250 up 0.3% at 15,581.69, and the AIM All-Share down 0.3% at 753.82.
German GDP figures showed the economy contracted over the second quarter with quarter-on-quarter figures showing a fall of 0.2%, missing the expectation of flat and considerably below the previous result of 0.7% growth. The result highlights the struggles of the German economy, where confidence has been depressed by the geopolitical tensions with Russia, with whom it has close trade relations.
French GDP, meanwhile, grew by 0.1% year-on-year, down from 0.8% in the first quarter, while quarter-on-quarter growth came in flat, missing the expectation of 0.1% growth.
Eurozone GDP data was mixed with year-on-year data meeting expectations at a 0.7% growth, falling from 0.9% the previous quarter. However, quarter-on-quarter GDP showed that the economy was flat, missing economists' consensus of a 0.1% growth.
The Eurozone CPI year-on-year reading met the consensus figure of 0.4%, down from 0.5% in July. However, month-on-month CPI missed the expectation of a fall of 0.6%, instead falling 0.7%.
?The Eurozone really is teetering on the brink, and this ship is sailing straight towards deflation unless the ECB can somehow manage to divert its path. A full-scale programme of quantitative easing is beginning to look like the only hand [ECB President] Mario Draghi has got left to play." says Dennis de Jong, managing director at UFX.com.
European markets continued to fall amid these economic results with the CAC 40 down 0.5% and the DAX also down 0.5%.
The Euro however, has appreciated against the US dollar following the news and is at USD1.3390.
In corporate news, Carillion lead the FTSE 250 gainers with its shares up 7.8% after it said it has held meetings with a number of major Balfour Beatty shareholders since Monday, as it seeks to push through a merger between the two construction companies.
Carillion said Thursday that it continues to believe in the "powerful strategic logic" and financial benefits of a merger with Balfour Beatty and is therefore continuing to consider its position. The company said it is confident that as a direct result of the merger, the cost base of the combined group could be reduced by at least GBP175 million a year by the end of 2016 and that earnings would consequently be significantly enhanced from that year.
Also top of the FTSE 250 is Ophir Energy, as its shares have risen 5.4% after the company reported it has swung to a profit for the first half on Thursday, boosted by the sale of its stake in three blocks in Tanzania to Pavilion Energy PLC, which will leave the company well financed into 2015, while it also announced a share buyback of up to USD100 million.
Still ahead on Thursday is US weekly unemployment figures at 1330 BST.
By Neil Thakrar; [email protected]
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