Market overview: Pearson bounces on large volumes, charts still weak

1630:Close Dovish remarks from ECB president Mario Draghi put a bid into equity markets, although some traders had already been anticipating a bounce after Wednesday’s carnage. Pearson led the bounce on a spike in trading volumes, although the price charts still had an extraordinarily weak look to them on a medium-term basis. Commodity stocks paced gains on both the Footsie and the FTSE 250. To take note of, remarks from top Chinese officials that yuan weakness was not in the best interests of the Asian giant. There was also a fair bit of ‘market chatter’ regarding lessened prospects for Fed tightening in 2016. FTSE 100 up 100.21 points to 5,773.79.

1600: US oil stocks increased by 4.0m barrels in the latest week, according to the IEA.

1538: HSBC has reportedly upped its forecast for cable from 1.50 to 1.60.

1440: Prompt month Brent crude futures are only 0.22% lower to $27.82 per barrel on the ICE.

1400: Manufacturing conditions in the Philadelphia region contracted modestly this month, according to the latest report from the Federal Reserve Bank of Philadelphia. The diffusion index for current activity rose from revised reading of -10.2 in December to -3.5, slightly ahead of consensus estimates for a reading of -4. This marked the fifth consecutive month in negative territory.

1346: The euro/dollar is down 0.78% to 1.0805.

1338: He rarely fails to deliver a surprise. Great entertainment value. ECB boss Mario Draghi has said policy may be reconsidered at the next policy meeting in early March.

1246: Barclays told staff it was planning to cut up to 1,200 positions as it closed multiple operations in Asia, Brazil and Russia and exited from trading precious metals.

1245: European Central Bank has kept its main interest rates unchanged, as was widely expected. Now it's on to Draghi's press conference which will kick-off at 13:30.

1244: Aviva has picked up RBC's motor insurance unit for £281m.

1142: BHP Billiton moving up the leaderboard despite UBS saying a dividend cut looms large.

1053: Speaking from Davos a top Chinese official said there was no need for a devaluation, Bloomberg TV reported.

1052: Iran should add about 325,000 barrels of oil a day to the market by the end of the year, the FT's Short View says, citing Energy Aspects. VLCC spot rates are also down sharply this week from levels at twice their long-term average reached last year, it adds. Shell has no immediate need to cut its dividend, but longer-term it may want to tie it to a fixed proportion of earnings, Lex says.

0855: Speaking at the World Economic Forum in Davos, Ray Dalio, the founder of the world's largest hedge-fund, Bridgewater, recommended central banks focus on the asymmetric risks that existed given the stage of the long-term debt cycle we are in. Careful you don't end up pushing on a string, he said. "Wait until you see whites of the eyes of inflation," he added. Leverage in China is not excessively high at present, he said.

0854: Oil futures under pressure again.

0840: Some broker recommendations catching people's attention this morning are: Goldman downgrades Aveva to sell, UBS slaps a 'sell' sticker on ITV, Citi cuts Anglo to sell and RBC gives Schroders a boost, upping its recommendation to outperform.

0838: Stocks have started the morning with a bounce after Wall Street managed to close comfortably off its intra-day lows. Pearson is at the head of risers after maintaining its divi, although StanChart and Lloyds are seeing some selling pressure and acting as an offset. ITV has been started at a ‘sell’ by UBS. On Wednesday, the FTSE, Cac and Nikkei, Dax joined the Hang Seng, Dax and Bovespa in ‘bear-market’ territory. The Shanghai Stock Exchange’s Composite Index has closed 3.23% lower this morning. There is also some slight selling pressure in oil futures following yesterday’s leg lower. The PBoC has injected more liquidity into the country’s financial system ahead of the Lunar New Year holiday. The focus today in markets should – barring surprises – be on the ECB’s policy announcement and follow-up press briefing. Some traders were left scratching their heads by a late rally in oil and credit markets last night. In any case, those seem to be the current stress-points in the market (and the HK dollar). FTSE 100 up 48.93 to 5,722.51.