London midday: Commodity rebound boosts markets, TSB surges on M&A

Strong gains from mining and oil stocks and M&A activity in the banking sector gave UK markets a big lift on Thursday morning, with the FTSE 100 trading nearly 1% higher by lunchtime.

Resource shares were on the rise as commodity prices rebounded after recent falls, while positive Chinese bank lending data eased concerns about a slowdown. Meanwhile, TSB Banking Group surged after a takeover approach from Spain's Banco Sabadell.

The Footsie was up 0.92% at 6,783.25 by noon.

In economic data on Thursday, new renminbi loans rose by 1.02bn yuan in February, less than the 1.47bn extended in the prior month but well ahead of the 700bn expected by economists.

The UK trade balance registered an unexpectedly large improvement at the start of the year. The deficit on sales of goods overseas shrank to £8.4bn in January from a revised £9.9bn, better than the £9.7bn consensus forecast.

Meanwhile, Eurozone industrial production fell 0.1% in January after a 0.3% rise in December, missing the +0.2% estimate.

TSB, Lloyds rise on Sabadell offer

Shares in recently-floated TSB surged 25% after the company received a bid from Banco Sabadell, helping shares in 50% owner Lloyds higher. A preliminary bid at 340p per share has been tabled, the lender confirmed, 80p higher than its price at flotation last June.

RBS was also making gains after Investec raised its stance from 'sell' to 'hold' following an 11% drop in the shares since the bank's annual results two weeks ago.

Mining stocks were on the rebound after recent China-related weakness, with metal prices firming up in morning trade. Fresnillo, Anglo American, Rio Tinto and Glencore were all performing well.

Antofagasta gained 2.5% after reaching an agreement with locals to resolve two-week-long protests that have affected production at its flagship Los Pelambres copper project in Chile. The company expected normal operations to resume in the coming days, but admitted that the industrial action resulted in 8,000 tonnes of lost production.

Oil and gas peers Shell and BP were also in demand as crude prices recovered 1.1% to $58.18 a barrel.

However, resources giant BHP Billiton was bucking the trend after going ex-dividend, along with Direct Line, Hargreaves Lansdown, Hammerson, Land Securities, Shire and Standard Chartered.

Morrisons was swinging between gains and losses after reporting a £792m loss before tax for the year ending February 2015 as it wrote down the value of its stores by £1.3bn. Like-for-like sales slumped 5.9% for the whole, but the decline eased to 2.6% by the fourth quarter.

Soco International plummeted 24% after the oil and gas group said profits sank to just $14m in 2014 from $104.1m the year before on the back of challenging market conditions.

Shares in ASOS soared 20% after the online fashion retailer impressed investors with a strong acceleration in sales growth in the second quarter, helped by a 30% jump in sales in the UK.

Market Movers

techMARK 3,158.57 +0.68%
FTSE 100 6,783.25 +0.92%
FTSE 250 17,048.27 +0.59%

FTSE 100 - Risers
Fresnillo (FRES) 675.50p +3.92%
Antofagasta (ANTO) 716.50p +2.50%
Anglo American (AAL) 1,112.50p +2.49%
Rio Tinto (RIO) 2,914.50p +2.48%
Glencore (GLEN) 292.60p +2.43%
Randgold Resources Ltd. (RRS) 4,654.00p +2.40%
Royal Dutch Shell 'A' (RDSA) 1,981.50p +2.35%
Royal Dutch Shell 'B' (RDSB) 2,078.50p +2.31%
AstraZeneca (AZN) 4,401.00p +2.24%
SABMiller (SAB) 3,646.50p +2.11%

FTSE 100 - Fallers
Standard Chartered (STAN) 983.00p -4.05%
Direct Line Insurance Group (DLG) 319.50p -3.18%
TUI AG Reg Shs (DI) (TUI) 1,135.00p -1.48%
Hargreaves Lansdown (HL.) 1,106.00p -0.90%
Dixons Carphone (DC.) 431.90p -0.87%
Hammerson (HMSO) 649.50p -0.84%
BHP Billiton (BLT) 1,462.00p -0.68%
BT Group (BT.A) 443.50p -0.67%
Ashtead Group (AHT) 1,109.00p -0.63%
easyJet (EZJ) 1,727.00p -0.58%

FTSE 250 - Risers
TSB Banking Group (TSB) 330.80p +25.26%
Cineworld Group (CINE) 472.90p +5.53%
Hunting (HTG) 491.50p +5.34%
Centamin (DI) (CEY) 57.55p +5.21%
Supergroup (SGP) 899.00p +4.53%
Kaz Minerals (KAZ) 213.30p +4.30%
Interserve (IRV) 609.50p +4.19%
Ophir Energy (OPHR) 131.70p +3.62%
Lonmin (LMI) 114.80p +3.61%
Afren (AFR) 6.71p +3.55%

FTSE 250 - Fallers
Soco International (SIA) 184.70p -23.68%
Serco Group (SRP) 175.30p -15.07%
Home Retail Group (HOME) 178.00p -8.95%
Spire Healthcare Group (SPI) 319.60p -2.98%
Brown (N.) Group (BWNG) 330.40p -2.51%
Greggs (GRG) 993.00p -1.97%
Carillion (CLLN) 345.50p -1.57%
Infinis Energy (INFI) 188.30p -1.41%
Crest Nicholson Holdings (CRST) 413.50p -1.38%
Balfour Beatty (BBY) 230.00p -1.25%