20th Jan 2015 17:08
LONDON (Alliance News) - The FTSE 100 and FTSE 250 closed higher for a fourth consecutive trading session Tuesday, driven by better-than-expected economic growth in China and positive consumer sentiment in Germany and the eurozone.
The FTSE 100 closed up 0.5% at 6,620.10, the FTSE 250 up 0.4% at 16,126.56, while the AIM All-Share index up 0.2% at 698.65, marking the second day of gains for the junior market index.
In mainland Europe, the CAC 40 in Paris closed up 1.2%, while the DAX 30 in Frankfurt continued to make new record highs, closing up 0.1%. At the close of London equity trade, Wall Street was trading lower, with the DJIA down 0.6%, the S&P 500 down 0.4%, and the Nasdaq Composite was down 0.3%.
The Chinese economy grew 7.3% in the fourth quarter from a year ago, marking the weakest growth since the first quarter of 2009. However, the figure beat economists' expectations for a drop to 7.2% growth and maintained the growth posted in the third quarter, giving equity markets a boost.
Miners climbed on the back of the positive Chinese data. Glencore closed up 3.9%, Anglo American ended up 2.9%, BHP Billiton, up 1.8%, and Antofagasta ended up 1.6%. In the FTSE 250, Vedanta Resources closed as the biggest gainer, up 8.3%, while KAZ Minerals closed up 6.7%, and Laird up 4.2%.
The FTSE 350 Mining sector index was the best performing sector index Tuesday, closing up 2.3%.
The positive news from China helped the market shrug off new forecasts from the International Monetary Fund, which followed the World Bank and reduced its forecast for 2015 global growth. The Washington-based lender said the global economy is set to grow 3.5% this year, down from its prior forecast of 3.8%, as positive effects of lower oil prices and the depreciation of the euro and yen are being more than offset by persistent negative forces.
Falling oil prices and the weak euro boosted German economic confidence to an 11-month high in January, survey results from the ZEW Centre for European Economic Research showed. The indicator of economic sentiment rose sharply to 48.4 in January, from 34.9 in December, the Mannheim-based institute said. The reading was forecast to rise to 40. For the euro area, the indicator of economic sentiment climbed 13.4 points to 45.2 in January. Economists had expected the index to make a more modest climb to 37.6.
The gold price climbed to its highest level in almost five months. The yellow metal hit a high of USD1,297.09 an ounce, sending precious metal mining stocks higher. In the FTSE 100, Fresnillo was the best performing stock, up 4.0%, and Randgold Resources closed up 2.5%.
Oil prices came under pressure again. Brent oil hit a low for the day of USD47.77 a barrel, not far from its recent near-six-year low of USD45.16 a barrel, and West Texas Intermediate fell to USD46.44 a barrel.
International Consolidated Airlines Group, up 3.4%, rose to its highest level since the merged company listed in early 2011. EasyJet, up 2.4%, was also amongst the biggest FTSE 100 winners.
Admiral Group, down 1.8%, and Direct Line Insurance Group, down 0.7%, were amongst the worst FTSE 100 performers, and Esure Group, down 3.3%, was one of the biggest midcap fallers, hit by a report from the AA saying UK car insurance premiums rose at a slower rate over the final three months of last year than in the previous quarter, though further increases are expected as insurers continue to raise premiums.
The AA British Insurance Premium Index's average 'shoparound' quote for an annual comprehensive car insurance policy increased to GBP540.26 in the fourth quarter of 2014, up 0.2% from the third quarter.
Unilever, down 0.7%, was another big blue-chip faller. The Anglo-Dutch consumer goods giant reported a higher 2014 profit as it managed to offset a currency hit with price rises and cost cutting, but its shares fell as its fourth quarter sales growth missed analysts' expectations and it gave a cautious outlook for 2015.
Unilever reported underlying sales growth of 2.1% for the fourth quarter of the year, short of analyst expectations for 2.7% growth, as it was hit by slowing growth in emerging markets, particularly China. Unilever also said it expects similar market conditions and competitive pressure in 2015.
Afren, down 5.6%, was the biggest decliner in the FTSE 250 after New Horizon Oil and Gas Ltd, which trades as T5 Oil and Gas, refuted reports that it was considering making a bid for Afren.
William Hill, down 3.7%, was the second-biggest faller. The betting operator said revenue and adjusted operating profit fell in the fourth quarter of 2014 as football results went against it over the Christmas holidays, and it suffered a similar fate in the third week of 2015 although it said it has started the new year in a strong position.
3i Infrastructure said it will sell its entire stake in UK train leasing company Eversholt Rail Group to a Hong Kong-based infrastructure company, generating estimated proceeds of about GBP358 million. Eversholt is one of three train rolling stock leasing companies in the UK, and it owns about 28% of the current UK passenger train fleet. The leasing companies lease the stock to the train operating companies, and Eversholt leases to 11 of those operators. 3i Infrastructure closed amongst the best FTSE 250 performers, up 3.5%.
In the economic calendar Wednesday, the Bank of England will release its minutes from its latest policy meeting at 0930 GMT, alongside UK unemployment and wage data. US MBA mortgage applications data for the week ending January 16 is at 1200 GMT.
The corporate calendar is busy Wednesday. Dixons Carphone will issue a third quarter interim management statement as will Land Securities Group, FirstGroup, and Halfords Group. Drinks giant SABMiller will release a third quarter update, and FTSE 100-listed miner BHP Billiton will release its December quarter operational review. WH Smith will issue a Christmas trading statement, and JD Weatherspoon will release a second quarter trading statement.
By Neil Thakrar; [email protected]; @NeilThakrar1
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