London midday: Investors wait on ECB's Draghi

Stocks in London were at the day's high come midday, ahead of European Central Bank chief Mario Draghi's testimony before the European parliament and after Chinese officials set a higher daily fixing for the country's currency.

Investors were expected to be on the lookout for any hints about the magnitude of further stimulus from the ECB when it met in March, which was know thought to be quite likely, although recent volatility in bank stocks after Japan moved interest rates into negative territory seemed to cloud the outlook.

Against that backdrop, as of 1213 GMT the Footsie was higher by 126.97 points to 5,834.54 points.

Citing conversations with policymakers, Reuters reported on 12 February there was "firm support" within the governing council for a deposit rate cut at the ECB's next meeting, in March.

Nonetheless, "appetite for more radical action is still limited" the newswire said.

Stocks had started the day with sharp gains after China's central bank set a higher daily reference value for the country's currency, with central bank chief Zhou Xiaochuan talking over the weekend about the need for patience in balancing reform, growth and stability, as well as China's need to remain a responsible economic power.

The People's Bank of China set the daily fixing for the country's currency, the yuan, 0.3% higher at 6.5118 - its loftiest level since November.

On the back of Xiaochuan's remarks, Deutsche Bank's chief economist for the region, Zhiwei Zhang, lowered his estimate on the odds for a large renminbi devaluation from 15% to 10%.

US equity markets were scheduled to remain closed on Monday in observance of Presidents' Day.

Weak data out of Asia

Chinese exports and imports weakened substantially in January, with exports 11.2% lower year-on-year in US dollar terms (consensus: -1.8%) and imports off by 18.8% (consensus: -3.6%).

However, economists cautioned the data had likely been distorted by the impact of the Lunar New Year holidays.

"It is arguably too early to jump to conclusions and we’ll have to wait until we get the February data and can iron out some of the seasonal volatility before we can get a clearer idea of how trade is performing," Capital Economics said.

Japanese gross domestic product shrank by an annualised 1.4% in the last three months of 2015 (consensus: -0.8%).

Consumer goods giant's savings programme delivers earlier than expected bang

Reckitt Benckiser saw broad growth in the year to 31 December, despite a year of mixed market conditions. The FTSE 100 consumer goods giant saw total net revenue grow 5% on a constant currency basis to £8.87bn, and like-for-like revenue grow 6%, which exceeded the company's targets. Reckitt's gross margin expanded during the year by 140 basis points to 59.1%, which the company's board said was driven by mix, commodity costs and cost optimisation initiatives.

Banking giant HSBC said it had decided to retain its headquarters in the UK, adding that it was dropping its three-yearly review of where it is based. The bank said the board's decision was unanimous and comes after HSBC had threatened to move to Hong Kong in retaliation for stricter UK regulation. In a statement, HSBC said the UK was "an important and globally connected economy. It has an internationally respected regulatory framework and legal system, and immense experience in handling complex international affairs."

Defence group BAE Systems appointed Charles Woodburn to the newly-created role of chief operating officer. Woodburn would report to chief executive Ian King and be appointed to the BAE Systems board as an executive director in the second quarter of this year.

Fidessa confirmed its dividends as it posted flat pre-tax profit but a rise in revenue, as it continues with its investment programme. In its preliminary results for the year to the end of December, Fidessa reported flat pre-tax profit of £39.1m, although revenue rose 7% to £295.5m, beating consensus expectations of £290m.

Acacia Mining remained confident in a low gold price environment at the end of 2015, with the company reporting muted full year numbers on Monday, but an ongoing cost cutting plan to ensure sustainability. The FTSE 250 mining firm saw revenue dip 7% in the 12 months to 31 December to $868m (£597.71m), which it blamed on the 8% lower average gold price during the year.

United Arab Emirates-based healthcare provider Al Noor Hospitals’ merger with South Africa’s Mediclinic has been completed.

Market Movers

FTSE 100 (UKX) 5,831.99 2.18%
FTSE 250 (MCX) 15,752.78 2.08%
techMARK (TASX) 2,988.49 2.25%

FTSE 100 - Risers

Reckitt Benckiser Group (RB.) 6,339.00p 6.25%
Anglo American (AAL) 394.90p 5.60%
Old Mutual (OML) 167.70p 4.75%
International Consolidated Airlines Group SA (CDI) (IAG) 501.50p 4.52%
Aberdeen Asset Management (ADN) 230.10p 4.40%
Prudential (PRU) 1,207.50p 4.32%
Hargreaves Lansdown (HL.) 1,175.00p 3.98%
GKN (GKN) 265.50p 3.95%
Hammerson (HMSO) 556.00p 3.93%
Shire Plc (SHP) 3,780.00p 3.87%

FTSE 100 - Fallers

Fresnillo (FRES) 870.00p -3.01%
Randgold Resources Ltd. (RRS) 5,985.00p -2.76%
Rolls-Royce Holdings (RR.) 598.50p -1.24%
SABMiller (SAB) 4,155.00p 0.17%
Rio Tinto (RIO) 1,853.00p 0.30%
Berkeley Group Holdings (The) (BKG) 3,191.00p 0.31%
TUI AG Reg Shs (DI) (TUI) 1,014.00p 0.60%
Rexam (REX) 598.50p 0.76%
BHP Billiton (BLT) 702.10p 0.79%
Tesco (TSCO) 178.65p 0.93%

FTSE 250 - Risers

Fidessa Group (FDSA) 1,896.00p 7.06%
BGEO Group (BGEO) 1,732.00p 7.05%
IP Group (IPO) 177.50p 6.73%
Weir Group (WEIR) 911.50p 6.73%
Mitchells & Butlers (MAB) 277.50p 6.73%
Tullow Oil (TLW) 176.20p 6.21%
Atkins (WS) (ATK) 1,229.00p 6.13%
Ocado Group (OCDO) 259.50p 6.00%
Hays (HAS) 124.00p 5.71%
Drax Group (DRX) 240.00p 5.54%

FTSE 250 - Fallers

Acacia Mining (ACA) 227.10p -7.19%
Interserve (IRV) 350.10p -2.67%
Daejan Holdings (DJAN) 5,600.00p -1.75%
Centamin (DI) (CEY) 78.90p -1.62%
Dechra Pharmaceuticals (DPH) 1,003.00p -0.99%
Polymetal International (POLY) 609.00p -0.98%
NB Global Floating Rate Income Fund Ltd GBP (NBLS) 86.75p -0.86%
Assura (AGR) 53.75p -0.74%
Pendragon (PDG) 35.81p -0.72%
Shawbrook Group (SHAW) 257.10p -0.58%