London midday: Stocks gain after Chinese data, before Fed rate decision

London stocks advanced on Monday as Chinese data impressed and as investors looked ahead to the Federal Reserve’s interest rate decision this week.

Chinese industrial production rose 6.2% in November from a year earlier, compared to the previous month’s 5.6% increase and expectations for a 5.7% gain, the National Bureau of Statistics revealed on Saturday.

Separately, the statistics agency said retail sales in the world’s second largest economy jumped 11.2% in November, beating the 11.1% forecast and following a 11% rise in October.

“Chinese data over the weekend generally supported the picture of a moderate recovery in the industrial sector fuelled by higher credit growth and a slight improvement in exports,” according to Danske Bank.

“While encouraging, we still look for more rate cuts from PBoC to ease the debt burden of Chinese companies.”

In Monday news, Eurozone industrial production rose 0.6% in October from the previous month, according to data released by Eurostat. The figure surpassed economists’ expectations of a 0.3% rise, while industrial production on the year rose 1.9%, also beating estimates.

It is otherwise a quiet day of economic data with investors awaiting the release of UK and US inflation figures on Tuesday and the Federal Reserve’s interest rate decision on Wednesday. The Fed is widely expected to raise rates for the first time in nearly a decade by 25 basis points.

“This time last year we were convinced that the Fed wouldn't raise rates in 2015. We'll it looks like we'll be proved 15 days wrong,” Deutsche Bank analysts said.

“However with all that's going on in the world and with global nominal growth so low, it's hard for us to imagine they'll get very far in their hiking cycle.”

Meanwhile, oil prices continued to slide after the International Energy Agency forecast that the global supply glut was likely worsen next year dragged on prices. At 1138 GMT Brent crude fell 2.5% to $36.98 per barrel and West Texas Intermediate dropped 2.1% to $34.88 per barrel.

In company news, Man Group edged higher after confirming that it was in the process of appointing former trade minister Lord Livingston of Parkhead as its new chairman.

Entertainment One declined after saying it has completed its refinancing arrangement which was announced to shareholders at the beginning of the month.

Royal Dutch Shell dipped as it said its planned £55bn merger with BG Group cleared its last international regulatory hurdle as it received unconditional merger clearance from the Chinese Ministry of Commerce. BG Group’s shares rose.

Drax rallied after Goldman Sachs upgraded the stock to ‘buy’ from ‘sell’, saying the risk/reward was skewed to the upside following material underperformance, which it believes was due to declining gas and power prices in the UK.

Mining stocks were in the red, including Randgold Resources, BHP Billiton and Fresnillo, as gold, silver and copper prices fell on the Comex.

Housebuilders, including Barratt Developments, Persimmon, Taylor Wimpey and Bellway, were on the front foot after Bank of America Merrill Lynch said it remained supportive of the sector.

Market Movers

FTSE 100 (UKX) 5,960.40 0.13%
FTSE 250 (MCX) 16,886.51 0.05%
techMARK (TASX) 3,133.66 -0.13%

FTSE 100 - Risers

Old Mutual (OML) 167.40p 7.51%
Sainsbury (J) (SBRY) 241.40p 2.72%
Mondi (MNDI) 1,306.00p 2.43%
Hargreaves Lansdown (HL.) 1,437.00p 2.13%
Barratt Developments (BDEV) 604.00p 1.94%
InterContinental Hotels Group (IHG) 2,535.00p 1.60%
International Consolidated Airlines Group SA (CDI) (IAG) 575.50p 1.59%
United Utilities Group (UU.) 935.00p 1.52%
Tesco (TSCO) 146.50p 1.49%
Aberdeen Asset Management (ADN) 290.30p 1.40%

FTSE 100 - Fallers

Standard Chartered (STAN) 484.00p -2.29%
Shire Plc (SHP) 4,216.00p -1.93%
ARM Holdings (ARM) 1,056.00p -1.68%
BHP Billiton (BLT) 682.90p -1.63%
Randgold Resources Ltd. (RRS) 4,066.00p -1.50%
BP (BP.) 333.10p -1.45%
Ashtead Group (AHT) 1,073.00p -1.38%
Antofagasta (ANTO) 423.30p -1.31%
Glencore (GLEN) 84.30p -1.25%
Royal Bank of Scotland Group (RBS) 282.10p -1.19%

FTSE 250 - Risers

Investec (INVP) 454.80p 8.54%
Drax Group (DRX) 225.70p 6.41%
Polymetal International (POLY) 536.50p 4.38%
Man Group (EMG) 159.40p 3.91%
Auto Trader Group (AUTO) 438.00p 3.79%
Premier Oil (PMO) 51.15p 3.65%
Petra Diamonds Ltd.(DI) (PDL) 67.80p 3.51%
Enterprise Inns (ETI) 106.60p 3.50%
Nostrum Oil & Gas (NOG) 380.20p 2.76%
International Personal Finance (IPF) 303.00p 2.36%

FTSE 250 - Fallers

Evraz (EVR) 63.00p -8.36%
Kaz Minerals (KAZ) 90.10p -5.41%
Acacia Mining (ACA) 169.30p -4.89%
Vedanta Resources (VED) 275.90p -4.83%
Ophir Energy (OPHR) 82.15p -4.42%
Tullow Oil (TLW) 152.70p -4.32%
Aldermore Group (ALD) 203.00p -4.25%
Entertainment One Limited (ETO) 171.00p -3.39%
Paragon Group Of Companies (PAG) 354.60p -2.56%
Bovis Homes Group (BVS) 952.50p -2.41%