London midday: Stocks extend post-ECB rally as UK retail data beats forecasts

UK stocks were up on Friday morning after data showed an unexpected rise in retail sales, though gains were modest with markets already trading at a four-month high following a €1.1trn stimulus plan in Europe.

London’s FTSE 100 was up 0.2% at 6,812 by midday, after finishing the previous session at 6,796.60, its best close since mid-September.

The European Central Bank (ECB) unveiled on Thursday that it would buy €60bn-worth of private and public securities each month until September 2016 in a bid to revive growth and lift the euro area out of deflation.

In economic data on Friday, UK retail sales registered an unexpected 0.4% rise in December, boosted by an increased demand for fuel and steady sales over Christmas. Analysts had forecast sales to decline after 1.6% growth in November given the number of customers who flocked to stores for the Black Friday sales. As such, sales were up 2.3% over the quarter as a whole, the highest quarterly increase since April 2002.

Business activity growth in the Eurozone accelerated at its fastest pace in five months, according to the preliminary January purchasing managers' index (PMI) data published by Markit. The preliminary estimate of the Eurozone PMI composite output index rose from 51.4 in December to 52.2, ahead of the consensus estimate of 51.8.

Meanwhile, the HSBC/Markit Chinese manufacturing PMI edged higher to 49.8 in January from 49.6 the previous month, slightly ahead of forecasts but still under the 50-point mark that indicates a contraction.

Mining stocks drop, telecoms gain

Antofagasta, Glencore, Fresnillo, Vedanta Resources, Centamin, Randgold and Rio Tinto were trying with heavy losses as metal prices weakened. Anglo American was also falling on rumours that it is looking at offloading the Dawson and Foxleigh coal mines in Australia, adding the assets to a list of projects that it is seeking to sell.

Telecoms groups Vodafone and BT were making gains as M&A speculation in the industry picked up following the announcement that the owner of the Three network, Hutchison Whampoa, is in talks to buy O2 from Telefonica for £10bn.

Vodafone was also on the rise after UBS said at the decline in organic revenues is estimated to have eased in its third quarter. The bank forecasts a return to growth in the first quarter of next year, saying that the stock “remains one of our preferred picks in the sector”.

Building materials firm CRH was extending gains made on Thursday after confirming speculation that it could buy some of Lafarge and Holmium’s assets ahead of their proposed merger. Mike van Dulken from Accendo Markets said the purchase “could bolster CRH’s market presence in the region easily thanks to overlapping business allowing simple integration of new businesses with existing operations”.

Ultra Electronics, the UK defence, security, energy and transport group, fell after confirming that its IT contract with Oman airport has been scrapped. The termination would likely lead to a provision against contract balances in Ultra’s 2014 results, it said.

The share price of oil and gas group EnQuest surged after it reassured its financial position “remains resilient” despite the recent collapse in crude prices, as it slashed its capital expenditure budget for this year. EnQuest’s lenders also agreed to raise the covenants on its credit facility, lifting the net debt-to-operating profit multiples, to provide “flexibility” for the company.

Market Movers
techMARK 3,081.69 +0.46%
FTSE 100 6,812.03 +0.23%
FTSE 250 16,429.71 +0.31%

FTSE 100 - Risers
Shire Plc (SHP) 4,838.00p +2.63%
International Consolidated Airlines Group SA (CDI) (IAG) 537.50p +2.38%
CRH (CRH) 1,678.00p +2.38%
Hargreaves Lansdown (HL.) 1,024.00p +1.99%
Mondi (MNDI) 1,159.00p +1.85%
TUI AG Reg Shs (Post- 16/12/14)(DI) (TUIJ) 1,169.00p +1.83%
Coca-Cola HBC AG (CDI) (CCH) 1,114.00p +1.83%
BT Group (BT.A) 428.50p +1.73%
Pearson (PSON) 1,340.00p +1.67%
Unilever (ULVR) 2,831.00p +1.65%

FTSE 100 - Fallers
Tullow Oil (TLW) 368.80p -5.02%
Antofagasta (ANTO) 691.50p -3.82%
Glencore (GLEN) 256.10p -3.29%
BG Group (BG.) 885.50p -2.79%
Rio Tinto (RIO) 2,905.00p -2.07%
Randgold Resources Ltd. (RRS) 5,440.00p -2.07%
Fresnillo (FRES) 897.00p -1.97%
Weir Group (WEIR) 1,670.00p -1.76%
Standard Chartered (STAN) 940.40p -1.30%
Royal Dutch Shell 'A' (RDSA) 2,149.50p -1.24%

FTSE 250 - Risers
Afren (AFR) 20.82p +4.10%
SSP Group (SSPG) 275.30p +3.89%
Balfour Beatty (BBY) 223.80p +3.80%
Interserve (IRV) 514.50p +3.75%
Henderson Group (HGG) 235.60p +3.15%
Grainger (GRI) 194.80p +3.07%
Premier Farnell (PFL) 169.10p +2.73%
Dairy Crest Group (DCG) 486.90p +2.72%
St. Modwen Properties (SMP) 420.60p +2.56%
Man Group (EMG) 175.60p +2.27%

FTSE 250 - Fallers
Centamin (DI) (CEY) 68.50p -4.99%
Hunting (HTG) 475.70p -4.84%
Supergroup (SGP) 954.00p -4.60%
Vedanta Resources (VED) 450.70p -4.02%
Telecom Plus (TEP) 1,055.00p -3.56%
Lonmin (LMI) 173.70p -3.29%
Ultra Electronics Holdings (ULE) 1,772.00p -2.74%
Kaz Minerals (KAZ) 203.60p -2.54%
Acacia Mining (ACA) 302.80p -2.32%
Rentokil Initial (RTO) 121.80p -2.17%