London midday: Equities gain as banking stocks and oil prices rebound

London stocks edged higher on Wednesday as banking stocks and oil prices recovered.

Deutsche Bank gave the rest of the sector a boost as its shares reversed two days of falls on reports that it will implement an emergency bond buyback plan.

The bank is expected to focus its emergency buyback plan on some €50bn of senior bonds, according to the Financial Times.

The report came after Deutsche Bank was forced to reassure staff that the bank was “rock solid” and German Finance Minister Wolfgang Schauble said he's not worried about the lender after its shares hit a 30-year low on Tuesday.

"It appears that those reports of Deutsche Bank potentially buying back debt has done far more to reassure investors than the comments from co-CEO John Ryan and German finance minister Wolfgang Schauble yesterday, and has inspired an impressive surge across the banking sector as a whole," said Connor Campbell, senior market analyst at Spreadex.

In another boost to the market, oil prices rose after Iran's Press TV reported that Iranian oil minister Bijan Zangeneh said Tehran was ready to negotiate with Saudi Arabia on the supply glut.

Brent crude increased 2.6% to $31.16 per barrel and West Texas Intermediate climbed 2.4% to $28.64 per barrel at 1145 GMT.

Meanwhile, all eyes will be on Federal Reserve chair Janet Yellen's testimony to US Congress at 1500 GMT. Markets will be looking for clues on when the Fed will next raise interest rates in light of the slowdown in economic growth.

Closer to home, UK industrial production fell 0.4% year-on-year in December, trailing estimates for a 1% increase. Manufacturing output declined 1.7%, more than the 1.4% fall that was forecast.

“Declining industrial production and manufacturing output, combined with headwinds facing producers from a troubled world economy, point to the growth in the services sector pulling even further ahead over the next few quarters, said Martin Beck, senior economic advisor to the EY ITEM Club. "As a result, a more balanced expansion continues to look like a forlorn hope."

On the company front, Hikma Pharmaceuticals plunged as the cash consideration for its takeover of Roxane Laboratories almost halved on the back of significantly lower revenue projections.

Homewares retailer Dunelm Group rallied after it declared a special dividend payment and reported a solid first half of the year.

ARM Holdings declined despite posting a strong set of full year results and saying it was confident of meeting forecasts for 2016 as demand for its microchip technology continues to grow.

Glencore slumped after Societe Generale downgraded the stock to 'hold' from 'buy'.

Tullow Oil tumbled as the company reported full year revenues had fallen 27% from $2.21bn (£1.52bn) in 2014 to $1.61bn, due to the drop in oil prices.

Greene King gained as it said record trading on Christmas Day supported growth in sales over the festive period as well as in the 40-week period up to 7 February.

Market Movers

FTSE 100 (UKX) 5,686.13 0.96%
FTSE 250 (MCX) 15,530.60 1.39%
techMARK (TASX) 2,937.79 0.52%

FTSE 100 - Risers

Prudential (PRU) 1,198.00p 6.39%
Aberdeen Asset Management (ADN) 236.60p 4.92%
Old Mutual (OML) 161.40p 4.81%
International Consolidated Airlines Group SA (CDI) (IAG) 505.50p 4.53%
St James's Place (STJ) 846.00p 4.25%
Legal & General Group (LGEN) 211.00p 4.25%
Tesco (TSCO) 181.00p 4.14%
Schroders (SDR) 2,462.00p 4.06%
Taylor Wimpey (TW.) 176.40p 3.89%
Aviva (AV.) 421.90p 3.61%

FTSE 100 - Fallers

Hikma Pharmaceuticals (HIK) 1,748.00p -12.38%
Glencore (GLEN) 91.21p -3.42%
Fresnillo (FRES) 825.00p -3.28%
Randgold Resources Ltd. (RRS) 5,715.00p -3.22%
ARM Holdings (ARM) 922.50p -1.86%
TUI AG Reg Shs (DI) (TUI) 1,064.00p -1.75%
Compass Group (CPG) 1,192.00p -1.16%
BHP Billiton (BLT) 659.60p -0.98%
National Grid (NG.) 937.00p -0.71%
Antofagasta (ANTO) 408.40p -0.61%

FTSE 250 - Risers

Domino's Pizza Group (DOM) 943.00p 10.10%
Pendragon (PDG) 35.89p 8.07%
Virgin Money Holdings (UK) (VM.) 294.20p 7.53%
Marshalls (MSLH) 284.20p 7.41%
IP Group (IPO) 165.40p 6.57%
Zoopla Property Group (WI) (ZPLA) 212.40p 6.20%
Dunelm Group (DNLM) 876.00p 6.18%
Redrow (RDW) 428.70p 6.11%
Ocado Group (OCDO) 245.80p 5.72%
Sophos Group (SOPH) 186.10p 5.62%

FTSE 250 - Fallers

Tullow Oil (TLW) 145.20p -10.09%
Nostrum Oil & Gas (NOG) 259.20p -5.78%
Vedanta Resources (VED) 213.30p -1.93%
TalkTalk Telecom Group (TALK) 197.80p -1.79%
Elementis (ELM) 206.50p -1.71%
P2P Global Investments C (P2P2) 926.50p -1.28%
Ophir Energy (OPHR) 78.00p -0.95%
Ultra Electronics Holdings (ULE) 1,789.00p -0.89%
Spectris (SXS) 1,495.00p -0.86%
Assura (AGR) 55.15p -0.81%