London midday: Stocks at new all-time high on Chinese stimulus hopes

UK stocks were at a new record on Wednesday with investors looking on the bright side of weak economic from China, with hopes for further stimulus from Beijing pushing miners higher.

Chinese economic growth slowed to a six-year low, while growth in fixed-asset investment, industrial production and retail sales all eased, ramping up the pressure on policymakers to act.

"The prospect of more aggressive monetary stimulus from the People's Bank of China this year looks to be responsible for much of the gains seen in Europe this morning and could carry through to the US session as well," said Oanda analyst Craig Erlam.

The FTSE 100 was trading 0.39% higher at 7,102.79, having touched a new peak of 7,111.72 in morning trade. That surpassed the previous intraday all-time high of 7,095.36 reached last Friday.

Chinese gross domestic product expanded at an annual rate of just 7% in the first quarter of 2015, in line with estimates but down from 7.4% growth in the fourth quarter. This was the slowest rate of expansion since 2009 on the back of weakness in the property and manufacturing sectors.

Analysts at Danske Bank said growth could dip below the 7% rate targeted by the Chinese government in the second quarter. "With the government's growth target already challenged, the implications are that there will be more monetary easing and probably also some additional fiscal easing," they said.

Other Chinese data for March also released overnight showed that annual growth in fixed-asset investment slowed from 13.9% to 13.5%, industrial production from 6.8% to 6.4% and retail sales from 11.9% to 10.2%. All three indicators came in worse than forecast.

The European Central Bank (ECB) meeting at 12:45 and subsequent press conference at 13:30 are likely to keep market participants busy, with investors awaiting an update on how the ECB's quantitative easing programme is going.

Mining stocks edge higher

Following on from a strong performance on Tuesday, mining stocks were mostly higher due to hopes of Chinese stimulus. Anglo American, BHP Billiton and Glencore were all making gains.

Mexican precious metals producer Fresnillo was also in demand after making an impressive start to 2015 with both silver and gold output up significantly over last year, putting the company on track to hit its annual targets.

Next raced up the FTSE 100 index after JPMorgan lifted its rating on the high street retailer to ‘overweight’ from ‘neutral’.

Astrazeneca was higher after giving US regulatory updates on two pipeline products, with an encouraging review for a pair of diabetes treatments and granting of 'orphan drug' status for a cancer treatment that should ease its path to marketing approval.

High end fashion label Burberry also edged higher after strong demand for its iconic heritage trench coats and scarves helped second-half revenues rise 9%.

Business supplies distributor Bunzl fell after saying trading in the first quarter was in line with expectations with organic revenues up 2%, a slowdown from 3% last year. Investec has lowered its rating on Bunzl from 'buy' to 'hold', saying that its sees "limited upside".

Shares in metal flow engineering group Vesuvius dropped sharply after analysts at JPMorgan lowered their stance on the stock from 'overweight' to 'neutral', citing weak steel production in the US.

Market Movers
techMARK 3,260.14 +0.06%
FTSE 100 7,102.79 +0.39%
FTSE 250 17,899.50 +0.23%

FTSE 100 - Risers
Fresnillo (FRES) 747.50p +3.46%
Glencore (GLEN) 302.55p +3.14%
Anglo American (AAL) 1,067.00p +2.65%
Sports Direct International (SPD) 661.50p +2.48%
Babcock International Group (BAB) 1,031.00p +2.38%
CRH (CRH) 1,844.00p +2.27%
Dixons Carphone (DC.) 446.30p +2.25%
Weir Group (WEIR) 1,922.00p +2.23%
BHP Billiton (BLT) 1,491.00p +2.16%
Morrison (Wm) Supermarkets (MRW) 202.60p +1.81%

FTSE 100 - Fallers
Bunzl (BNZL) 1,851.00p -3.09%
Hikma Pharmaceuticals (HIK) 2,176.00p -2.20%
Severn Trent (SVT) 2,138.00p -1.57%
Reed Elsevier (REL) 1,152.00p -1.45%
SSE (SSE) 1,543.00p -1.34%
Reckitt Benckiser Group (RB.) 6,017.00p -1.21%
easyJet (EZJ) 1,850.00p -1.12%
United Utilities Group (UU.) 969.50p -0.97%
National Grid (NG.) 897.90p -0.87%
Aviva (AV.) 555.50p -0.80%

FTSE 250 - Risers
Premier Oil (PMO) 174.80p +5.62%
JD Sports Fashion (JD.) 535.00p +5.00%
Tullow Oil (TLW) 385.00p +4.45%
Ophir Energy (OPHR) 167.00p +3.73%
Lonmin (LMI) 138.30p +3.52%
Bank of Georgia Holdings (BGEO) 2,104.00p +3.29%
Cairn Energy (CNE) 177.20p +3.02%
AO World (AO.) 188.60p +2.72%
Amec Foster Wheeler (AMFW) 944.50p +2.66%
Monks Inv Trust (MNKS) 457.70p +2.42%

FTSE 250 - Fallers
Vesuvius (VSVS) 472.60p -5.57%
Virgin Money Holdings (UK) (VM.) 400.70p -5.05%
Indivior (INDV) 215.00p -4.23%
Soco International (SIA) 193.60p -1.93%
Acacia Mining (ACA) 287.80p -1.57%
Serco Group (SRP) 146.50p -1.55%
Alent (ALNT) 386.00p -1.40%
Cable & Wireless Communications (CWC) 65.20p -1.29%
Bwin.party Digital Entertainment (BPTY) 80.85p -1.28%
Inmarsat (ISAT) 962.00p -1.23%