London close: Stocks edge higher after Chinese data

Equities and copper prices found their footing on Wednesday following a raft of more or less in-line economic data released overnight in China, although the latest UK employment numbers left a trail of confused analysts in their wake.

The FTSE ended the day higher by 21.92 points or 0.35% at 6,297.20, while the Stoxx Europe 600 index rose 0.65% to 378.71.

An unexpected drop in British unemployment to its lowest since 2008 gave the pound a boost versus the US dollar – albeit after recent sharp drops – but failed to lift the uncertainty surrounding the probable timing of the Bank of England’s first rate hike.

Three-month copper futures finished up by 0.5% to $4,938.0 per metric tonne on the LME.

Front month Brent crude futures on the other hand dropped 2.71% to $46.19 per barrel after the latest weekly inventory data from the American Petroleum Institute revealed a 6.3 barrel build in US oil stocks last week. That weighed on the shares of oil majors BP and Royal Dutch Shell.

Something for hawks and doves in UK employment data

Unemployment in the UK unexpectedly slipped to 5.3% over the three months to September, the lowest level since April 2008. However, 'core' earnings were weaker, falling to 2.5% from 2.8% in August, against consensus of 2.6%.

Howard Archer of IHS Global Insight summed up the report well, saying that the "uneven" jobs report "will do little to clarify the uncertainty over exactly when the Bank of England will hike interest rates".

Economists at Barclays appeared to be a tad more downbeat, pointing out how "if our inflation forecasts are realised and core wage growth does not pick up and at an increasing rate, we could begin to see real wages dip further, eating into consumption, supporting our view that private consumption will slow into H2 15 and 2016."

Better tone to Chinese data

Fixed asset investment in Asia's largest economy rose at a 10.2% year-on-year pace in the first ten months of the year, according to the country's statistics bureau, in line with the consensus estimate from economists.

Julian Evans-Pritchard, China economist at Capital Economics, said: "The rebound in fixed investment growth last month suggest that the recent easing of monetary and fiscal policy is beginning to have the desired effect. With policymakers likely to err on this side of caution and continue to adopt an accommodative policy stance, we expect this tailwind to economic activity to last for some time."

Carney thinks British-EU relationship is working

Speaking at today’s Bank of England Open Forum Bank of England governor Mark Carney told Sky News that the country’s relationship with the European Union was working, but added that the BoE’s job was “to make whatever the British people decide work […] if things change we will do what's necessary."

SAB Miller and Anheuser Busch-InBev seal takeover

Anheuser Busch-InBev made a formal offer to buy London-listed rival SABMiller for £44 a share in cash, the companies confirmed on Wednesday. The deal, which is expected to complete in the second half of next year and follows months of negotiations and extended deadlines from the Takeover Panel, represents a premium of around 50% to SABMiller’s closing price prior to renewed speculation of an approach.

Shares in information services company Experian rallied for the second day in a row, after Citigroup lifted its price target on the stock by 9% to 1,340p to reflect higher earnings and the sector’s re-rating. Morgan Stanley lent a helping hand, hiking its target on the shares to 1,400p from 1,350p.

Interim results from Sainsbury's showed like-for-like sales shrank 1.6% and profits crashing 17.9% lower to £308m but ahead of consensus estimates of £300m. Underlying earnings per share tumbled 17.2% to 12p, but were also ahead of forecasts of 11.5p.

Housebuilder Barratt said net private reservations per week in the 19 weeks to 8 November were up 12.5% to 261 with a sales rate of 0.70 (2014: 0.63) net private reservations per active site per week against 0.63 last year. The company said it was “on track to deliver further good progress in FY16”.

SSE saw adjusted profits jump in the first half of the year, driven by revenue from its wholesale energy portfolio management and electricity generation division. Revenue rose from £12.4bn in 2014 to £13.8bn, an 11% jump from 2014 and ahead of consensus estimates for £12.5bn.

FTSE 250: TalkTalk jumps

TalkTalk estimated the one-off financial impact of the cyber attack that occurred in October at between £30m and £35m. The telecommunications company said earnings before interest, tax, depreciation and amortisation fell to £90m from £110m, missing expectations of around £98m. However, it raised its interim dividend 15% from last year to 5.29p – a move that surprised analysts and investors who had been expecting a cut.

Tullett Prebon agreed to buy rival inter-dealer brokes Icap's hybrid voice broking and information business in an all-shares deal. Tullett will issue a parcel of new shares greater than its current share capital such that once the deal is completed, Icap shareholders will own 36.1% of its rival, existing Tullett shareholders will own 44% of the enlarged company and the remainder will be owned by a new holding company of the Icap business.

Tullow Oil also had a poor showing on the market, after it adjusted the full year production guidance from its West Africa operations and confirmed revenue and costs are in line with annual expectations.

Egyptian gold miner Centamin kept production levels up in the third quarter but rising cash costs and a falling gold price led to a crunch on profits. Gold production from the Sukari field in the three months to 30 September reached 105,413 ounces. But the cost of this production climbed to $767 per ounce and all-in sustaining costs to $918 per ounce, versus the $706 cash and $853 all-in costs in the previous quarter.

Great Portland Estates posted a 15.7% rise in first half pre-tax profit and a 14% jump in net asset value per share on the back of solid leasing activity. NAV per share rose to 808p in the six months to the end of September, while pre-tax profit came in at £24.3m.

Market Movers

FTSE 100 (UKX) 6,297.20 0.35%
FTSE 250 (MCX) 17,101.77 0.36%
techMARK (TASX) 3,105.90 1.06%

FTSE 100 - Risers

St James's Place (STJ) 971.00p 2.53%
Merlin Entertainments (MERL) 410.30p 2.50%
Experian (EXPN) 1,214.00p 2.27%
Reckitt Benckiser Group (RB.) 6,295.00p 2.19%
Intertek Group (ITRK) 2,589.00p 2.17%
Babcock International Group (BAB) 979.00p 2.14%
BT Group (BT.A) 475.45p 2.14%
Aviva (AV.) 491.30p 2.10%
WPP (WPP) 1,514.00p 1.95%
Relx plc (REL) 1,171.00p 1.91%

FTSE 100 - Fallers

Sainsbury (J) (SBRY) 253.30p -7.08%
SSE (SSE) 1,444.00p -3.22%
BHP Billiton (BLT) 923.70p -2.41%
Royal Dutch Shell 'A' (RDSA) 1,656.50p -1.75%
Morrison (Wm) Supermarkets (MRW) 156.90p -1.63%
Aberdeen Asset Management (ADN) 339.50p -1.59%
Royal Dutch Shell 'B' (RDSB) 1,667.50p -1.45%
Barratt Developments (BDEV) 568.00p -1.30%
Marks & Spencer Group (MKS) 526.00p -1.22%
BP (BP.) 377.90p -1.20%

FTSE 250 - Risers

TalkTalk Telecom Group (TALK) 246.00p 13.21%
Sophos Group (SOPH) 274.30p 8.94%
Ophir Energy (OPHR) 101.80p 7.90%
Ultra Electronics Holdings (ULE) 1,849.00p 5.67%
ICAP (IAP) 498.00p 5.58%
Just Eat (JE.) 457.60p 3.98%
BTG (BTG) 539.00p 3.55%
OneSavings Bank (OSB) 399.50p 3.42%
Kaz Minerals (KAZ) 87.60p 3.24%
Domino's Pizza Group (DOM) 1,092.00p 3.11%

FTSE 250 - Fallers

Tullett Prebon (TLPR) 320.10p -10.06%
Tullow Oil (TLW) 197.60p -7.49%
Petra Diamonds Ltd.(DI) (PDL) 61.00p -6.01%
Grafton Group Units (GFTU) 650.00p -5.46%
Hunting (HTG) 329.40p -4.49%
Centamin (DI) (CEY) 60.05p -4.07%
esure Group (ESUR) 245.90p -3.61%
Vedanta Resources (VED) 414.50p -3.38%
Amec Foster Wheeler (AMFW) 495.00p -3.32%
SIG (SHI) 122.70p -3.00%