London close: Stocks finish higher after better-than-expected UK data

London stocks closed the session higher on Friday as investors weighed better-than-expected UK economic data on trade and industrial production.

The FTSE 100 closed up 0.40% to 7,258.75 points. The pound climbed 0.01% against the dollar to $1.2498 and rose 0.15% versus the euro to €1.1745.

Oil prices were also higher after the International Energy Agency raised its forecast for global oil demand and said it expected OPEC’s promise to lower output will be delivered by its members. The IEA upgraded its estimate for 2017 demand growth to 1.4m barrels a day, from 1.3m barrels forecast in its January report.

Brent crude jumped 2.09% to $56.82 per barrel and West Texas Intermediate increased 1.9% to $54.07 per barrel at 1655 GMT.

On the data front, UK trade deficit narrowed to £8.6bn in the fourth quarter from £14.1bn the previous quarter, boosted by an increase in exports to countries outside the European Union, the Office for National Statistics said.

In December, the deficit on trade in goods and services was scaled back to £3.3bn from £3.6bn, which the ONS said contributed to the narrowing in the fourth quarter. Analysts had expected a deficit of £3.5bn.

Separately, ONS revealed industrial production increased 1.1% in December compared to a month ago, driven by an increase in manufacturing. Economists expected a 0.2% rise.

On the year, industrial production jumped 4.3% in December, exceeding estimates for a 3.2% rise.

Manufacturing output climbed 2.1% in December from a month ago and 4% from the same month a year ago, ahead of forecasts for a month-on-month increase of 0.5% and a year-on-year gain of 1.7%.

Construction output edged up 1.8% month-on-month in December, compared to estimates for a 1% rise, and grew 0.6% year-on-year, compared to estimates for a 0.5% fall.

“Today’s economic activity data added to other evidence suggesting that the economy maintained a significant amount of momentum at the end of 2016 and implies that GDP growth is becoming more balanced,” according to Capital Economics.

Meanwhile, the NIESR said UK economic growth accelerated in the three months to January from the previous quarter, driven by strong consumer spending and improvement in production industries.

The NIESR estimated gross domestic product rose 0.7% in the quarter to January, compared to 0.6% growth in the three months to December.

However, the research institute said it sees economic growth softening to 1.7% this year as rising inflation weighs on consumer spending. GDP rose 2.0% in 2016, easing from 2.2% in 2015 and 3.1% in 2014, according to the latest official figures.

In the US, official figures showed the cost of imported goods rose 0.4% in January from a month ago, following a revised 0.5% in December. Economists had expected a 0.2% rise.

Another survey showed US consumer confidence fell more than anticipated in February as expectations for future economic conditions weakened.

The University of Michigan’s preliminary estimate for the consumer sentiment index came to 95.7 in February, down from 98.5 in January and compared to economists’ forecasts of 97.8.

In corporate news, mining shares rallied on the back of the positive UK data with Anglo American, Rio Tinto and Antofagasta in the black.

Dunelm Group advanced as Numis upgraded the stock to ‘buy’ from ‘add’ and reiterated a target price of 825p.

Elementis gained as it entered into an agreement to acquire specialty chemicals platform SummitReheis from an affiliate of One Rock Capital Partners for an enterprise value of $360m

Reckitt Benckiser slumped as the company announced it has agreed to buy US baby formula maker Mead Johnson for $16.6bn and as it reported weaker-than-expected sales in the fourth quarter due to declines in Europe and North America.

Royal Bank of Scotland was on the back foot as it rejected calls to expand a £400m scheme to reimburse customers who claim they were mistreated by the bank’s restructuring division.

Just Eat tanked after saying David Buttress had informed the board of his intention to step down from his role as chief executive officer due to urgent family matters.

Greene King’s shares fell as Canaccord Genuity reiterated a ‘buy’ rating after the pub operator’s third quarter trading update, but cut the target price to 850p from 900p and lowered its earnings guidance.

Market Movers

FTSE 100 (UKX) 7,258.75 0.40%
FTSE 250 (MCX) 18,715.36 0.47%
techMARK (TASX) 3,345.76 0.37%

FTSE 100 - Risers

Rio Tinto (RIO) 3,572.50p 5.63%
Antofagasta (ANTO) 866.00p 4.65%
Anglo American (AAL) 1,352.50p 4.40%
Glencore (GLEN) 320.75p 2.74%
BHP Billiton (BLT) 1,370.00p 2.39%
Capita (CPI) 525.00p 2.34%
Rolls-Royce Holdings (RR.) 732.50p 2.02%
BAE Systems (BA.) 612.00p 2.00%
Old Mutual (OML) 211.20p 1.78%
Fresnillo (FRES) 1,556.00p 1.77%

FTSE 100 - Fallers

Reckitt Benckiser Group (RB.) 7,025.00p -2.96%
Royal Bank of Scotland Group (RBS) 228.90p -1.80%
Convatec Group (CTEC) 240.30p -1.52%
Smith & Nephew (SN.) 1,186.00p -1.00%
Hikma Pharmaceuticals (HIK) 1,937.00p -0.92%
3i Group (III) 714.50p -0.83%
Sainsbury (J) (SBRY) 264.60p -0.79%
Lloyds Banking Group (LLOY) 65.64p -0.76%
Worldpay Group (WPG) 272.00p -0.73%
Vodafone Group (VOD) 197.70p -0.70%

FTSE 250 - Risers

Elementis (ELM) 300.70p 9.27%
Kaz Minerals (KAZ) 570.50p 8.67%
Nostrum Oil & Gas (NOG) 459.70p 5.39%
Aberdeen Asset Management (ADN) 268.20p 5.38%
Dunelm Group (DNLM) 650.00p 5.26%
Ferrexpo (FXPO) 163.00p 5.23%
Ashmore Group (ASHM) 350.00p 4.48%
Berendsen (BRSN) 938.50p 4.45%
Vedanta Resources (VED) 1,081.00p 3.54%
Amec Foster Wheeler (AMFW) 460.40p 3.53%

FTSE 250 - Fallers

Just Eat (JE.) 518.50p -6.49%
Electrocomponents (ECM) 475.50p -5.65%
Dairy Crest Group (DCG) 557.50p -3.38%
Greene King (GNK) 678.50p -3.21%
Essentra (ESNT) 434.30p -2.34%
Senior (SNR) 193.50p -2.32%
Shawbrook Group (SHAW) 260.50p -1.96%
CLS Holdings (CLI) 1,627.00p -1.69%
OneSavings Bank (OSB) 356.60p -1.65%
PZ Cussons (PZC) 312.10p -1.55%