3rd Jan 2014 10:43
LONDON (Alliance News) - UK stocks are trading marginally higher Friday as UK macro-economic data helps investors to shrug off concerns about the global economic outlook and a weakening Chinese economy. Strong Christmas sales figures posted by Next PLC are also helping to lift the FTSE 100.
By mid-morning, the FTSE 100 is up 0.1% at 6,726.09, the FTSE 250 is up 0.3% at 15,959.66, and the AIM All-Share is 0.2% higher at 860.31.
In data recently released, the Bank of England revealed that UK mortgage approvals increased for the ninth consecutive month in November. The number of loans approved for house purchases was 70,758 in November, up from 68,029 in October. Approvals also exceeded the 69,000 level forecast by economists.
A survey by Markit Economics and the Chartered Institute of Purchasing and Supply also came in stronger-than-expected. Although the UK's construction sector growth was shown to moderate in December, as new order inflows eased, the fall was more modest than had been expected. The seasonally-adjusted purchasing managers' index fell to 62.1 in December from November's 75-month peak of 62.6, beating expectations of a drop to 62.
Despite the marginal fall, the December reading suggested solid improvement in operating conditions at construction firms. Moreover, the latest outcome marked eight months of continuous output growth.
The data has gone some way to overcome concerns surrounding yet another weak economic reading from China early Friday. Non-manufacturing business activity in China slipped to 54.6 in December, from 56.0 in November.
A strong corporate release from Next also has helped to lift the UK's headline index.
The homeware and clothing retailer said that sales in the fourth quarter have been significantly ahead of expectations, boosted by online sales and strong trading in the run-up to Christmas and in its end-of-season sale. As a result, Next now expects a pretax profit of between GBP684 million and GBP700 million in the year to January 25, and it declared a special dividend of 50 pence per share.
The retailer had raised its upper-end pretax profit expectations as recently as October, to its previous guidance of up to GBP680 million.
Next shares have soared Friday, currently quoted up 8.8%.
Schroders, up 1.6%, is another big blue-chip winner. Barclays has upgraded the company to Overweight from Underweight, lifting its price target to 3,010.00p from 2,150.00p. Barclays believes that the headwind experienced when Schroders' previous head of UK Equities and manager of the UK Alpha Fund Richard Buxton announced his departure in March 2013, is now receding.
Alongside this, Barclays likes the company's attractive product range, noting that 68% of the group's assets under management benchmarks have outperformed over the last three years.
Still to come in the data calendar Friday, the ISM New York index is released at 1445 GMT, ahead of a speech from out-going Federal Reserve Chairman Ben Bernanke at 1930 GMT.
By James Kemp; [email protected]; @jamespkemp
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