London midday: Stocks fall after China inflation misses forecasts

London stocks dropped on Thursday as official data showed China inflation grew less than expected in January.

China’s consumer inflation increased 1.8% year-on-year in January, compared to 1.6% in December. While it marked an improvement on the previous month, it missed analysts’ estimates of 1.9%.

“The pick-up in inflation last month was mostly seasonal,” Capital Economics said, referring to the benefits of the Lunar New Year holiday. “That said, underlying price pressures also appear to be edging up which ought to ease deflation concerns.”

On a brighter note, oil prices edged higher on hopes that global producers would agree to freeze output. Brent crude rose 2.4% to $35.37 per barrel and West Texas Intermediate increased 3.1% to $31.65 per barrel at 1131 GMT.

Meanwhile, traders continued to digest the Federal Reserve’s minutes of its 26-27 January policy. The minutes showed rate setters spent plenty of time debating the implications of global economic and financial developments on the US economic outlook, agreeing that uncertainty had increased, with many arguing this raised the downside risks to the outlook.

"The uncertainty about the economic outlook, with increased downside risks, and the need for more evidence to gauge the balance of risks suggest that a March rate hike is only a theoretical possibility, but in practice we do not expect to see a hike before June,” said Rabobank strategist Philip Marey.

In company news, Centrica shares gained after it reported full year results that beat expectations.

BAE Systems also rallied after posting full year results that were in line with analysts’ forecasts and issued guidance that underlying earnings per share will rise between 5-10% in 2016 as it enters a what it says is an improved business environment.

Go-Ahead was higher after reporting a solid performance across most of its operations in the six months to 26 December with a 6.8% rise in overall revenue to £1.67bn

Indivior edged higher after reporting a better-than-expected drop in profit in sales in the first full year since being demerged from Reckitt Benckiser.

Going the other way, miners were the biggest fallers after worse-than-expected Chinese inflation added to worries about the world’s largest consumer of commodities. Shares in Anglo American, Antofagasta and Rio Tinto plunged.

Tullow Oil tumbled after the oil and gas exploration company said it had identified a potential issue with the turret bearing on the vessel serving its Jubilee field offshore Ghana.

Market Movers

FTSE 100 (UKX) 6,018.93 -0.19%
FTSE 250 (MCX) 16,237.32 0.50%
techMARK (TASX) 3,107.61 0.30%

FTSE 100 - Risers

Centrica (CNA) 203.80p 5.00%
Rolls-Royce Holdings (RR.) 660.00p 4.51%
Berkeley Group Holdings (The) (BKG) 3,398.00p 3.09%
International Consolidated Airlines Group SA (CDI) (IAG) 540.00p 2.27%
Sainsbury (J) (SBRY) 267.30p 2.22%
Taylor Wimpey (TW.) 183.20p 2.00%
ARM Holdings (ARM) 946.00p 1.72%
BT Group (BT.A) 468.90p 1.60%
Barratt Developments (BDEV) 581.00p 1.57%
BAE Systems (BA.) 507.00p 1.54%

FTSE 100 - Fallers

Anglo American (AAL) 448.75p -4.12%
GlaxoSmithKline (GSK) 1,379.00p -3.16%
Rio Tinto (RIO) 1,890.50p -3.10%
AstraZeneca (AZN) 4,200.00p -1.86%
Standard Chartered (STAN) 439.10p -1.60%
Royal Dutch Shell 'A' (RDSA) 1,617.50p -1.49%
Royal Dutch Shell 'B' (RDSB) 1,612.50p -1.44%
Randgold Resources Ltd. (RRS) 6,045.00p -1.23%
Sports Direct International (SPD) 414.50p -1.22%
Hikma Pharmaceuticals (HIK) 1,891.00p -1.10%

FTSE 250 - Risers

Indivior (INDV) 163.90p 10.97%
Nostrum Oil & Gas (NOG) 276.60p 7.79%
Go-Ahead Group (GOG) 2,403.00p 6.85%
Henderson Group (HGG) 232.80p 6.16%
Poundland Group (PLND) 172.40p 5.25%
Aveva Group (AVV) 1,410.00p 5.07%
JD Sports Fashion (JD.) 1,118.00p 4.49%
Bodycote (BOY) 577.00p 4.43%
Rathbone Brothers (RAT) 2,255.00p 3.73%
888 Holdings (888) 177.00p 3.63%

FTSE 250 - Fallers

Tullow Oil (TLW) 178.80p -6.58%
Jimmy Choo (CHOO) 118.60p -4.12%
Acacia Mining (ACA) 224.60p -2.77%
Just Eat (JE.) 361.10p -2.72%
Barr (A.G.) (BAG) 494.60p -2.54%
Mediclinic International (MDC) 883.00p -2.21%
QinetiQ Group (QQ.) 235.60p -2.04%
Riverstone Energy Limited (RSE) 755.00p -1.95%
CLS Holdings (CLI) 1,476.00p -1.93%
Millennium & Copthorne Hotels (MLC) 396.00p -1.88%