London midday: Equities led higher by mining stocks

London stocks edged higher on Monday as oil prices rose and weak Chinese data fuelled stimulus hopes.

Mining shares led the gains, including Anglo American, BHP Billiton and Rio Tinto, after a report showed a decline in Chinese business sentiment.

The MNI China Business Sentiment Indicator fell for the second consecutive month to 49.9 in February from 52.3 in January as production dropped to a two-year low.

Mike van Dulken, head of research at Accendo Markets, said mining stocks were supported by “perhaps optimism that soft China business sentiment will result in more stimulus from Beijing and that the nation’s new securities regulator will grease the wheels of the IPO market and get Chinese equities further from their recent lows, recovering lost ground not just this year, but since last summer”.

Adding to positive sentiment, oil prices rallied with Brent crude rising 3.1% to $34.08 per barrel and West Texas Intermediate up 3.5% to $32.93 per barrel at 1151 GMT.

Meanwhile, London Mayor Boris Johnson’s surprise decision to back the campaign for Britain to leave the European Union sent the pound to its biggest fall against the US dollar in about a year. The pound plunged 1.91% against the US dollar.

“Whilst the jovial Johnson has roundly rogered sterling this Monday following his Brexit-backing bombshell, causing the pound to sink to a 15-month low against a basket of currencies following investors’ violent (and arguably over-pronounced) reaction, the FTSE held strong, starting off the busiest earnings week of the season (nearly a fifth of the index’s top 100 reporting in the next few days) in style,” said Connor Campbell, financial analyst at Spreadex.

In economic data, Markit’s Eurozone manufacturing purchasing managers’ index fell to 51 in February from 52.3 in January, worse than the reading of 52 expected by analysts. However, a reading above 50 signals an expansion in sector activity.

In company news, HSBC shares declined after it reported full year profit that missed forecasts and predicted a “bumpier financial environment” ahead due to a slowdown in China.

Home Retail advanced following media reports over the weekend that Sainsbury’s could seek an extension to the Takeover Panel’s 18 March deadline, after South African retailer Steinhoff made an offer to the Argos owner.

Bovis Homes edged higher after reporting a jump in full year pre-tax profit and revenue as legal completions and prices rose and the housebuilder sounded an upbeat note on 2016.

Other housebuilders, however, slumped with Berkeley Group, Taylor Wimpey, Barratt Developments and British Land Company in the red. The Sunday Telegraph reported that the market is pricing in concerns of another recession as shares in housebuilders are down about 18% during the past six months.

Primark owner Associated British Foods climbed as it said full year profits will be better than expected, supported by the recent weakening of sterling.

Market Movers

FTSE 100 (UKX) 6,020.85 1.19%
FTSE 250 (MCX) 16,289.87 0.82%
techMARK (TASX) 3,127.31 1.19%

FTSE 100 - Risers

Anglo American (AAL) 466.10p 6.74%
BHP Billiton (BLT) 776.70p 6.05%
Rio Tinto (RIO) 1,998.00p 5.63%
Glencore (GLEN) 124.50p 5.15%
Antofagasta (ANTO) 499.40p 3.93%
Coca-Cola HBC AG (CDI) (CCH) 1,467.00p 3.82%
Standard Chartered (STAN) 429.45p 3.58%
GKN (GKN) 287.70p 3.04%
Ashtead Group (AHT) 871.00p 2.89%
Aberdeen Asset Management (ADN) 245.00p 2.68%

FTSE 100 - Fallers

HSBC Holdings (HSBA) 436.85p -2.89%
Berkeley Group Holdings (The) (BKG) 3,274.00p -2.65%
Taylor Wimpey (TW.) 179.00p -2.56%
Barratt Developments (BDEV) 570.00p -2.48%
British Land Company (BLND) 678.00p -2.09%
Sainsbury (J) (SBRY) 255.90p -1.99%
Land Securities Group (LAND) 1,016.00p -1.93%
Persimmon (PSN) 2,037.00p -1.21%
Randgold Resources Ltd. (RRS) 6,295.00p -0.94%
Standard Life (SL.) 334.40p -0.71%

FTSE 250 - Risers

Home Retail Group (HOME) 172.70p 12.43%
Dechra Pharmaceuticals (DPH) 1,145.00p 7.82%
Tullow Oil (TLW) 169.70p 6.06%
Allied Minds (ALM) 345.00p 5.57%
Cairn Energy (CNE) 162.00p 4.25%
Just Eat (JE.) 378.70p 4.04%
Fidelity China Special Situations (FCSS) 126.40p 3.61%
Aldermore Group (ALD) 199.90p 3.52%
Victrex plc (VCT) 1,559.00p 3.52%
Vedanta Resources (VED) 257.80p 3.00%

FTSE 250 - Fallers

Poundland Group (PLND) 173.00p -4.63%
Bellway (BWY) 2,580.00p -2.46%
CLS Holdings (CLI) 1,488.00p -2.43%
B&M European Value Retail S.A. (DI) (BME) 285.40p -1.92%
Redrow (RDW) 416.00p -1.91%
Zoopla Property Group (WI) (ZPLA) 215.80p -1.91%
Redefine International (RDI) 42.55p -1.85%
Sophos Group (SOPH) 210.00p -1.78%
Jimmy Choo (CHOO) 120.10p -1.72%
Centamin (DI) (CEY) 84.20p -1.69%