London midday: China stimulus hopes help markets rebound

Bargain hunting and hopes for stimulus measures in China gave UK stocks a lift on Monday, as investors readied for a busy week for financial markets worldwide.

The FTSE 100 was up 0.5% at 6,776.87 by midday.

The Footsie had lost 2.5% over the past five sessions on the back of a strengthening US dollar, concerns about Greece and slowdown worries in China. This was the index's worst weekly performance so far this year.

However, sentiment improved slightly on Monday after Chinese Premier Li Keqiang said at the National People's Congress on Sunday that the government is ready to boost the private sector and domestic demand if growth continues to ease.

“The good news is that in the past couple of years we did not resort to massive stimulus measures for economic growth. We still have more tools in our toolbox,” he said.

Looking ahead, economic data such as New York manufacturing, US industrial production and Eurozone inflation will be in focus over the next couple of days, though the Federal Reserve decision and UK Budget on Wednesday will likely dominate proceedings this week.

As for the Fed meeting, investors will be waiting to see whether policymakers drop the term 'patient' from their guidance about the timing of interest rates. "More and more investors expect the US central bank to raise its benchmark interest rate sooner rather than later," Accendo Markets said.

CRH drops, Astra study underwhelms

Irish building materials group CRH dropped on the news that Holcim has rejected the terms of a proposed merger with Lafarge, demanding a better deal. CRH is set to snap up €6.5bn of assets from Holcim and Lafarge subject to the completion of the merger.

Results from Astrazeneca's much-anticipated Pegasus study of its Brilinta treatment found that the drug reduced the chances of another heart attack or stroke in patients. However, the stock was slightly lower after the study showed that bleeding was higher compared with the placebo.

Mining stocks were mostly higher on Chinese stimulus hopes, including BHP Billiton and Rio Tinto. Even Antofagasta was in demand despite on reports that the copper miner may have to close it Los Pelambres project in Chile after a court ruling last week to destroy a tailings dam wall at the site on environmental concerns.

Afren's share price was extending losses made Friday when the company proposed a debt-for-equity swap with lenders to keep its afloat. The deal will lead to a substantial dilution of shareholders' interests.

Balfour Beatty was on the rise after Jefferies upgraded the stock to 'buy' and hiked its target price from 115p to 270p.

However, housing-related groups such as Countrywide, Zoopla and Persimmon were subdued after a Goldman Sachs downgrade to 'neutral'.

Market Movers
techMARK 3,204.66 +0.38%
FTSE 100 6,776.87 +0.54%
FTSE 250 17,176.15 +0.39%

FTSE 100 - Risers
Tesco (TSCO) 239.45p +2.83%
Next (NXT) 7,505.00p +2.11%
Meggitt (MGGT) 585.50p +1.83%
Johnson Matthey (JMAT) 3,309.00p +1.82%
London Stock Exchange Group (LSE) 2,532.00p +1.69%
Associated British Foods (ABF) 3,034.00p +1.68%
Aberdeen Asset Management (ADN) 458.70p +1.64%
Burberry Group (BRBY) 1,874.00p +1.63%
BHP Billiton (BLT) 1,411.00p +1.55%
ARM Holdings (ARM) 1,204.00p +1.52%

FTSE 100 - Fallers
CRH (CRH) 1,741.00p -3.87%
Experian (EXPN) 1,110.00p -1.77%
Tullow Oil (TLW) 293.70p -1.54%
Royal Bank of Scotland Group (RBS) 350.80p -1.52%
Weir Group (WEIR) 1,767.00p -1.17%
Coca-Cola HBC AG (CDI) (CCH) 1,109.00p -0.98%
Sports Direct International (SPD) 652.00p -0.76%
Centrica (CNA) 236.20p -0.71%
Morrison (Wm) Supermarkets (MRW) 202.60p -0.69%
Rolls-Royce Holdings (RR.) 963.00p -0.67%

FTSE 250 - Risers
Provident Financial (PFG) 2,749.00p +4.01%
Beazley (BEZ) 294.70p +3.04%
Allied Minds (ALM) 659.00p +2.97%
CLS Holdings (CLI) 1,752.00p +2.94%
Playtech (PTEC) 775.00p +2.65%
AL Noor Hospitals Group (ANH) 1,003.00p +2.56%
Indivior (INDV) 179.00p +2.46%
JD Sports Fashion (JD.) 495.00p +2.38%
Vesuvius (VSVS) 499.00p +2.34%
Informa (INF) 575.50p +2.22%

FTSE 250 - Fallers
Afren (AFR) 3.80p -18.28%
AO World (AO.) 180.00p -6.05%
Serco Group (SRP) 171.70p -5.81%
Nostrum Oil & Gas (NOG) 554.00p -5.46%
Vedanta Resources (VED) 463.00p -4.87%
Drax Group (DRX) 363.40p -3.68%
Polymetal International (POLY) 504.00p -3.36%
Thomas Cook Group (TCG) 153.40p -3.34%
Premier Oil (PMO) 126.40p -2.77%
Hunting (HTG) 441.60p -2.71%