London close: Stocks rise on UK manufacturing data, rally in oil prices

The FTSE 100 closed in positive territory on Wednesday after data on UK manufacturing and industrial production beat forecasts and as oil prices rallied.

UK manufacturing production in January fell 0.1% compared to a year ago and rose 0.7% compared to a month ago, beating forecasts for a 0.7% year-on-year drop and a 0.2% month-on-month increase.

Industrial production increased 0.2% in January on the year, ahead of analysts’ estimates for zero growth. However, month-on-month figures were worse than expectations for a 0.4% rise, climbing 0.3%.

“For a much-maligned sector it was a welcome relief, especially given last week’s woeful PMI, even if the report wasn’t unequivocally good news, the mining and energy sectors continuing to struggle,” said Connor Campbell, financial analyst at Spreadex.

Oil prices gained as government data showed US crude stockpiles rose in line with analysts’ expectations. Crude stocks increased 3.9m barrels to a total 521.9m barrels in the week to 4 March as predicted, according to the Energy Information Administration.

Total motor gasoline stockpiles fell 4.5m barrels, and distillate fuel stocks dropped 1.1m barrels. Production figures were broadly unchanged.

“Oil inventories were up again, while production flatlined, but markets opted to just look at the drawdown in gasoline stockpiles,” said IG’s senior market analyst Chris Beauchamp.

“Cherry picking of data has long been a theme in stock markets, but now commodities appear to be playing along too.”

Meanwhile, US wholesale inventories rose 0.3% in January, smashing estimates for a 0.2% decline.

On the downside, the National Institute of Economic and Social Research said UK economic growth slowed over the last three months. NIESR said its monthly estimates of GDP suggested UK economic output slowed to 0.3% in the three months to end-February, down from the 0.4% growth in the three months ending in January.

In company news, Prudential’s shares surged after it posted an annual pre-tax profit of £4bn, up 22% on the previous year, boosted by strong performances at its British, US and Asian life insurance businesses.

Ashtead slumped after Credit Suisse downgraded the stock to ‘underperform’ from ‘outperform’ and slashed the price target to 770p from 1,300p.

The Restaurant Group was under the cosh after saying 2015 like-for-like sales faltered as the challenging trading conditions from the end of last year continue into 2016 and look set to linger for longer.

DS Smith rallied after saying in a trading update that volumes and financial returns continue to grow despite ongoing challenging market conditions.

Cairn Energy jumped as it said it was "delighted" with the results of a second successful test well out of three drilled offshore Senegal, with oil flowing at rates that bode well for the wider field.

SSE advanced after JPMorgan lifted its rating on the utility to ‘overweight’ from ‘underweight’ and upped the price target to 1,550p from 1,280p.

Market Movers

FTSE 100 (UKX) 6,155.35 0.49%
FTSE 250 (MCX) 16,616.37 -0.23%
techMARK (TASX) 3,097.78 -0.11%

FTSE 100 - Risers

Prudential (PRU) 1,365.00p 2.90%
Glencore (GLEN) 143.25p 2.50%
SSE (SSE) 1,466.00p 2.16%
Royal Dutch Shell 'A' (RDSA) 1,694.50p 2.14%
Berkeley Group Holdings (The) (BKG) 3,000.00p 2.11%
Schroders (SDR) 2,691.00p 1.97%
Royal Dutch Shell 'B' (RDSB) 1,695.50p 1.92%
Taylor Wimpey (TW.) 176.40p 1.85%
DCC (DCC) 5,710.00p 1.78%
Reckitt Benckiser Group (RB.) 6,580.00p 1.70%

FTSE 100 - Fallers

Burberry Group (BRBY) 1,364.00p -6.70%
Barclays (BARC) 168.20p -2.21%
Standard Chartered (STAN) 470.90p -2.00%
Aberdeen Asset Management (ADN) 270.50p -1.89%
St James's Place (STJ) 865.00p -1.70%
Shire Plc (SHP) 3,745.00p -1.29%
Lloyds Banking Group (LLOY) 69.77p -1.22%
Smith & Nephew (SN.) 1,130.00p -1.05%
Ashtead Group (AHT) 852.50p -1.04%
Severn Trent (SVT) 2,067.00p -1.01%

FTSE 250 - Risers

Cairn Energy (CNE) 192.10p 13.27%
Tullow Oil (TLW) 213.30p 3.54%
NMC Health (NMC) 936.00p 3.03%
Allied Minds (ALM) 359.70p 2.77%
Wizz Air Holdings (WIZZ) 1,809.00p 2.67%
Wood Group (John) (WG.) 653.00p 2.35%
Auto Trader Group (AUTO) 368.80p 2.33%
Euromoney Institutional Investor (ERM) 945.50p 2.33%
Telecom Plus (TEP) 919.00p 2.28%
Ophir Energy (OPHR) 85.20p 2.28%

FTSE 250 - Fallers

Restaurant Group (RTN) 422.00p -22.28%
G4S (GFS) 187.50p -11.85%
Mitchells & Butlers (MAB) 267.30p -7.83%
Evraz (EVR) 88.90p -6.12%
SIG (SHI) 137.00p -5.32%
TalkTalk Telecom Group (TALK) 239.50p -4.96%
Vedanta Resources (VED) 317.10p -4.69%
Vesuvius (VSVS) 325.00p -4.55%
OneSavings Bank (OSB) 278.40p -4.33%
Ashmore Group (ASHM) 260.10p -4.09%