London midday: Stocks flat after mixed UK, China data

The FTSE 100 was flat at the midday mark on Wednesday as better-than-expected UK industrial output figures were offset by disappointing Chinese trade data.

Industrial output grew 1.6% year-on-year in April, beating forecasts for a 0.3% decline and following a 0.2% drop in March, the Office for National Statistics revealed.

Manufacturing production edged up 0.8% on the year, compared to forecasts for a 1.3% decrease and after a 1.9% fall in March.

“Despite the uncertainty surrounding the UK’s referendum on EU membership, which is just a fortnight away, this morning’s numbers show the industry has bounced back strongly,” said Dennis de Jong, managing director of UFX.com.

“A healthy industrial base remains critical to the strength of the UK economy and Chancellor George Osborne will be hoping that this growth in the sector can be sustained heading into the second half of the year.”

Earlier, official data showed China's global trade surplus widened to $49.98bn in May from April's $45.6bn, missing estimates of $55.70bn.

Exports fell 4.1%, compared to analysts’ forecast for a 4% drop and the previous month’s 1.8% slide. Imports dipped 0.4% in May but it was an improvement on April’s 10.9% plunge and better than expectations for a 6.8% decrease.

“China data is continuing to follow a downside trajectory and this noticeable decline in exports has reinforced the concerns over the slowing pace of economic growth,” said FXTM Research analyst Lukman Otunuga.

At the same time China's central bank slashed its forecast for exports to a drop of 1% this year compared to a previous estimate of 3.1% growth. However, the People's Bank of China said the economy will still grow 6.8% this year as it sees domestic recovery remaining on track.

Meanwhile, the World Bank cut its 2016 global growth forecasts to 2.4% from its January estimate of 2.9% amid persistently low commodity prices, weak trade and sluggish demand in advanced economies.

In its latest Global Economic Prospects report, the World Bank said emerging economies accounted for half of the downward revision as these markets have struggled to adapt to lower prices for commodities.

Bucking the trend, oil prices continued to rally after data showed a fall in US crude stockpiles, helping to ease concerns on the global supply glut. Continued supply disruptions in Nigeria also bolstered prices.

Brent crude jumped 1.11% to $52.02 per barrel and West Texas Intermediate increased 1.08% to $50.91 per barrel.

The American Petroleum Institute said late on Tuesday that commercial crude inventories fell by 3.6 million barrels last week, compared with expectations for a 2.7 million barrel draw.

The Energy Information Administration will release data on US weekly crude inventories at 1530 BST.

On the corporate front, Sainsbury's jumped after reporting a better-than-expected 0.8% like-for-like drop in first quarter sales.

Fellow grocer Tesco gained after Sky News reported the group may announce this week a sale of its Turkish unit Kipa and British restaurant chain Giraffe.

Royal Dutch Shell edged higher as RBC Capital raised its target price on the stock to 2,000p from 1,900p and reiterated an ‘outperform’ rating after the oil producer announced plans for more asset sales and cost-cutting over the next few years.

Mining stocks were also on the rise as metal prices gained. Fresnillo, Antofagasta, Randgold Resources and Anglo American rallied.

3i infrastructure jumped after it confirmed the successful completion of a £385m capital raise, having finished its open offer, placing and intermediaries offer and increased the initial target size from £350m.

WH Smith declined after it said like-for-like sales in the 14 weeks to 4 June 2016 as High Street sales fell, offset slightly by an increase in sales at the travel business.

Travel stocks were under the cosh, including TUI AG, easyJet and Thomas Cook, on the prospect of higher fuel costs following the recent rally in oil. A car bombing on Wednesday in the popular holiday destination of Turkey also weighed on sentiment in the sector.

Market Movers

FTSE 100 (UKX) 6,283.35 -0.02%
FTSE 250 (MCX) 17,153.16 -0.25%
techMARK (TASX) 3,125.80 -0.38%

FTSE 100 - Risers

Coca-Cola HBC AG (CDI) (CCH) 1,450.00p 2.84%
Royal Dutch Shell 'A' (RDSA) 1,795.00p 2.22%
Glencore (GLEN) 143.10p 2.21%
Royal Dutch Shell 'B' (RDSB) 1,803.50p 2.21%
Fresnillo (FRES) 1,173.00p 2.09%
Centrica (CNA) 209.90p 1.89%
Anglo American (AAL) 676.70p 1.68%
Tesco (TSCO) 159.40p 1.66%
Antofagasta (ANTO) 446.30p 1.41%
Randgold Resources Ltd. (RRS) 6,345.00p 1.12%

FTSE 100 - Fallers

Royal Bank of Scotland Group (RBS) 224.80p -2.13%
InterContinental Hotels Group (IHG) 2,676.00p -1.94%
easyJet (EZJ) 1,496.00p -1.64%
TUI AG Reg Shs (DI) (TUI) 1,028.00p -1.63%
Worldpay Group (WI) (WPG) 275.90p -1.60%
Barclays (BARC) 177.75p -1.39%
Direct Line Insurance Group (DLG) 364.00p -1.36%
Sky (SKY) 928.50p -1.33%
Dixons Carphone (DC.) 427.20p -1.23%
Lloyds Banking Group (LLOY) 69.40p -1.21%

FTSE 250 - Risers

3i Infrastructure (3IN) 175.00p 4.79%
Workspace Group (WKP) 866.00p 4.02%
IG Group Holdings (IGG) 819.00p 4.00%
Greencore Group (GNC) 332.80p 2.68%
Vedanta Resources (VED) 400.60p 2.30%
Amec Foster Wheeler (AMFW) 466.50p 2.19%
Cairn Energy (CNE) 201.10p 1.93%
Sophos Group (SOPH) 190.60p 1.93%
Tullow Oil (TLW) 257.70p 1.86%
Polymetal International (POLY) 892.50p 1.71%

FTSE 250 - Fallers

PayPoint (PAY) 965.00p -3.31%
Intermediate Capital Group (ICP) 645.00p -3.23%
Allied Minds (ALM) 332.10p -3.12%
WH Smith (SMWH) 1,686.00p -3.10%
Thomas Cook Group (TCG) 69.65p -3.06%
Ocado Group (OCDO) 252.50p -2.66%
Evraz (EVR) 124.00p -2.59%
OneSavings Bank (OSB) 329.40p -2.54%
Aldermore Group (ALD) 209.50p -2.29%
Pendragon (PDG) 39.36p -2.28%