London close: UK stocks shrug off weak data, finish higher after late rally

UK stocks rebounded slightly on Wednesday as investors went bargain-hunting after the worst sell-off so far this year, with markets pushing into positive territory by the close.

Disappointing economic data from China and weak production figures from the UK pressured equities lower earlier on, though a decent start on Wall Street boosted buying in afternoon trade.

The FTSE 100, which tumbled 2.5% to a seven-week low of 6,702.84 on Tuesday, finished the session up 0.28% at 6,721.51.

Nevertheless, UK markets were relatively subdued compared with their European counterparts as exporters on the continent benefitted from a weaker euro, which was trading its lowest in nearly 12 years against the dollar.

Rising speculation about a sooner-than-expected rate hike by the Federal Reserve and the start of the European Central Bank's bond-buying programme was driving the single currency closer to parity against the greenback.

The Fed should have already raised interest rates given the "rapidly improving" US economy, St Louis Fed president James Bullard said on Wednesday.

Economic data misses forecasts

Upside was limited in morning trade on Wednesday after UK industrial production unexpectedly slipped by 0.1% in January, surprisingly analysts who had expected 0.2% growth after a 0.2% decline in December.

Analysts at Capital Economics said the figures "provided further disappointing signs that the sector’s recovery is struggling to re-gain momentum, after almost grinding to a halt in the fourth quarter".

The annual rate of Chinese fixed asset investment growth slowed to 13.9% last month from 15.7% in January and Chinese retail sales grew 10.7% year-on-year in February, compared with 12% previously. Meanwhile, Chinese industrial production growth eased to just 6.8% from 8.3%, the lowest increase since March 2009.

The worse-than-expected data came just a week after China's government lowered its economic growth target to "around 7%" this year from 7.4% in 2014.

"Coming after a slump in factory gate prices yesterday, falls in retail sales and industrial production underlined the theme of a slowing Chinese economy," said analyst Chris Beauchamp from IG.

Domino Printing soars, Cairn and N Brown sink

Japan-based office equipment supplier Brother Industries has agreed to acquire British printing technology company Domino Printing Sciences for £1.03bn, causing shares in the FTSE 250 group to surge 30.5%. Domino, which has operations in the UK, China, Germany, India, Sweden and the US, will continue to operate as a standalone division in the business.

Cairn Energy dropped 17% after being issued with a bill of at least $1.6bn by the Indian government due to unpaid tax by a subsidiary, which the oil group has contested.

Retailer N Brown fell 15.5% after delivering its second profit warning in six months due to lower-than-expected product gross margins in the fourth quarter. The company said pre-tax profit for the full year would be "slightly below the range previously guided".

Shares in Burberry advanced after the British fashion house appointed Fabiola Arredondo as a non-executive director. Arredondo, once named by The Wall Street Journal as the most influential businesswoman in Europe, has previously held senior roles at Yahoo, the BBC and Bertelsmann.

Comments from Exane BNP Paribas were hitting the share price of Johnson Matthey as it lowered its stance on the chemicals outfit from 'outperform' to 'neutral', saying it sees lower medium-term structural growth and growing risks.

Copper miner Antofagasta dropped as sentiment continues to be dampened by social unrest and court cases affecting its flagship Los Pelambres copper project in Chile. Other mining stocks were mixed, with Anglo American and Randgold trading higher and Glencore and Fresnillo in the red.

Market Movers
techMARK 3,137.12 +0.99%
FTSE 100 6,721.51 +0.28%
FTSE 250 16,948.85 +0.16%

FTSE 100 - Risers
Aggreko (AGK) 1,572.00p +3.76%
Royal Mail (RMG) 437.60p +3.60%
International Consolidated Airlines Group SA (CDI) (IAG) 562.00p +3.02%
CRH (CRH) 1,742.00p +2.53%
Aberdeen Asset Management (ADN) 450.70p +2.18%
Schroders (SDR) 3,128.00p +2.16%
Ashtead Group (AHT) 1,116.00p +2.10%
Randgold Resources Ltd. (RRS) 4,545.00p +1.91%
Burberry Group (BRBY) 1,850.00p +1.87%
Admiral Group (ADM) 1,475.00p +1.79%

FTSE 100 - Fallers
Coca-Cola HBC AG (CDI) (CCH) 1,089.00p -2.33%
Sports Direct International (SPD) 657.00p -1.94%
Antofagasta (ANTO) 699.00p -1.69%
Babcock International Group (BAB) 939.50p -1.67%
Johnson Matthey (JMAT) 3,253.00p -1.36%
BG Group (BG.) 840.00p -1.32%
Fresnillo (FRES) 650.00p -1.07%
Tullow Oil (TLW) 318.60p -0.99%
Weir Group (WEIR) 1,811.00p -0.77%
Lloyds Banking Group (LLOY) 78.16p -0.75%

FTSE 250 - Risers
Domino Printing Sciences (DNO) 941.00p +30.51%
Domino's Pizza Group (DOM) 775.00p +5.87%
Greggs (GRG) 1,013.00p +4.76%
Pace (PIC) 380.60p +4.25%
Afren (AFR) 6.48p +3.51%
Fidessa Group (FDSA) 2,185.00p +2.97%
Alent (ALNT) 399.10p +2.86%
Booker Group (BOK) 159.00p +2.78%
Renishaw (RSW) 2,413.00p +2.68%
Inmarsat (ISAT) 900.00p +2.51%

FTSE 250 - Fallers
Brown (N.) Group (BWNG) 338.90p -17.06%
Cairn Energy (CNE) 155.00p -15.49%
IP Group (IPO) 221.80p -5.38%
Hunting (HTG) 466.60p -4.39%
Daejan Holdings (DJAN) 5,560.00p -4.06%
Premier Oil (PMO) 138.60p -4.02%
Hikma Pharmaceuticals (HIK) 2,243.00p -3.15%
Just Eat (JE.) 335.80p -3.00%
Drax Group (DRX) 374.90p -2.98%
Jimmy Choo (CHOO) 163.10p -2.92%