London midday: Stocks gain as oil prices rise, China hints at further stimulus

UK equities edged higher on Friday as oil prices rebounded and China’s central bank hinted at the prospect of further stimulus measures.

The People’s Bank of China Governor Zhou Xiaochuan said there were more tools in the central bank’s policy to help turnaround the nation’s economic slowdown.

“While the reform direction is clear, managing the reform pace will need windows (of opportunity) and conditions ... The pace will vary, but the reform will be set to continue and the direction is not changed,” Zhou said at a conference held by the Institute of International Finance in Shanghai in conjunction with a G20 meeting of central bank governors and finance ministers.

Oil prices reversed the previous day’s declines as traders closed short positions, with Brent crude rising 1.9% to $35.98 per barrel and West Texas Intermediate increasing 1.9% to $33.73 per barrel at 1133 GMT.

Meanwhile, investors shrugged off a worse than expected survey from GfK on UK consumer confidence. The index measuring sentiment fell to 0 in February from 4 in January, missing analysts’ estimates of 3.

In the Eurozone, the European Commission’s headline economic sentiment indicator fell to 103.8 from a revised 105.1 in January. This was below economists’ expectations for a reading of 104.4 and marked the lowest reading since June 2015. The EC said the fall came on the back of deteriorating confidence among consumers in all business sectors apart from construction, while in terms of countries, the Netherlands saw a sharp drop.

The EC’s business climate indicator also fell by 0.2 points to 0.07, missing consensus expectations for a reading of 0.28.

Still to come, Eurozone inflation figures are due at 1300 GMT, US gross domestic product data is out at 1330 GMT, US personal consumption figures will be released at 1500 GMT, and the University of Michigan’s consumer confidence survey will be published at 1500 GMT.

In company news, Royal Bank of Scotland snapped its early morning rally after narrowing its full year loss to £1.98bn in 2015 from £3.47bn the previous year as it was hit by a surge in litigation and conduct costs. “The bank’s CEO, Ross McEwan, might well feel the bank has achieved everything it wanted to in 2015, but an eighth year of losses – now totalling £51bn– has not impressed the markets, sending the shares tumbling by over 9%,” said IG analyst Alastair McCaig.

BHP Billiton’s shares rose as it denied reports it has reached a settlement with Brazilian authorities over the Samarco mine disaster. In early November, a tailings dam burst at the mine in Brazil's Minais Gerais region, killing 19 people in the resulting mudslides.

International Airlines Group advanced as the British Airways owner reported a 64% jump in annual pre-tax profits to €1.8bn (£1.4bn), helped in part by lower fuel prices.

Pearson was on the front foot as it reported a surge in net profits in 2015, following the sale of the Financial Times and The Economist.

William Hill declined as the gambling group posted a drop in 2015 profit as revenue fell, reflecting the lack of a major football tournament in the period, a lower average number of shops and a major restructuring on the Australian business.

Market Movers

FTSE 100 (UKX) 6,082.82 1.16%
FTSE 250 (MCX) 16,542.41 0.87%
techMARK (TASX) 3,185.13 0.42%

FTSE 100 - Risers

Anglo American (AAL) 446.45p 5.76%
Pearson (PSON) 845.50p 5.49%
Glencore (GLEN) 124.30p 4.63%
Rio Tinto (RIO) 1,890.00p 4.62%
Standard Chartered (STAN) 417.00p 4.59%
Burberry Group (BRBY) 1,234.00p 4.58%
Capita (CPI) 1,051.00p 3.34%
BHP Billiton (BLT) 711.80p 3.17%
Royal Dutch Shell 'B' (RDSB) 1,632.00p 3.10%
Royal Dutch Shell 'A' (RDSA) 1,637.00p 3.09%

FTSE 100 - Fallers

Royal Bank of Scotland Group (RBS) 224.50p -7.99%
International Consolidated Airlines Group SA (CDI) (IAG) 532.50p -4.66%
Sports Direct International (SPD) 389.20p -2.55%
Dixons Carphone (DC.) 430.50p -1.49%
Inmarsat (ISAT) 976.50p -1.31%
Merlin Entertainments (MERL) 447.50p -1.28%
easyJet (EZJ) 1,479.00p -1.07%
ITV (ITV) 250.90p -0.63%
AstraZeneca (AZN) 4,181.00p -0.43%
Sage Group (SGE) 583.50p -0.43%

FTSE 250 - Risers

Tullow Oil (TLW) 158.00p 6.90%
Michael Page International (MPI) 378.90p 5.54%
Weir Group (WEIR) 925.00p 5.05%
Petrofac Ltd. (PFC) 852.50p 4.92%
Aggreko (AGK) 909.50p 4.78%
Aldermore Group (ALD) 199.00p 4.68%
Amec Foster Wheeler (AMFW) 352.20p 4.63%
Vedanta Resources (VED) 253.00p 4.29%
Aveva Group (AVV) 1,497.00p 4.25%
International Personal Finance (IPF) 242.00p 3.68%

FTSE 250 - Fallers

Rathbone Brothers (RAT) 2,225.00p -2.28%
Dignity (DTY) 2,494.00p -2.04%
Jardine Lloyd Thompson Group (JLT) 789.50p -1.93%
William Hill (WMH) 394.10p -1.89%
Computacenter (CCC) 812.00p -1.58%
Ladbrokes (LAD) 132.30p -1.42%
Allied Minds (ALM) 320.50p -1.38%
Rank Group (RNK) 247.10p -1.16%
Rightmove (RMV) 3,870.00p -1.15%
UK Commercial Property Trust (UKCM) 77.40p -1.09%