London midday: Stocks gain as weak Eurozone CPI fuels stimulus hopes

London stocks rose as continued low Eurozone inflation figures added to hopes of further stimulus measures by the European Central Bank.

Eurostat’s final estimate of the Eurozone consumer price index confirmed a 0.1% year-on-year fall in September, down from August’s 0.1% rise, as energy prices continued to drag. The figures were as expected by analysts.

“With the Eurozone-wide figure expected at -0.1%, the region’s indices could see a return of the market-lifting hopes that always seem to creep in whenever any data suggests that Mario Draghi might need to dip into his ECB QE coffers for a bit of extra stimulus,” said Connor Campbell, financial analyst at Spreadex.

ECB policymaker Ewald Nowotny on Thursday said fresh measures were needed to lift inflation towards the monetary authority’s target of just below 2%. The weak inflation figures come despite the ECB’s €60m a month asset purchase programme which is due to run until at least September 2016. However, the ECB has indicated that it will consider extending the programme if the outlook for inflation worsens.

Speculation that the US Federal Reserve will keep interest rates unchanged is also on traders’ lips after a slate of lacklustre data including low inflation, worse-than-expected US retail sales and a disappointing non-farm payrolls report.

Sluggish recent data in China has added to hopes of further stimulus measures from the central bank.

Looking ahead, the University of Michigan’s consumer confidence report will be released at 1500 BST. Industrial and manufacturing production figures will be published at 1415 BST.

Among corporate stocks, Burberry extended declines after revealing second quarter sales were hit by a slowdown in China.

Astrazeneca dropped as US health regulators declined to approve its fixed-dose diabetes drug combination.

Oil stocks were higher including BP and Royal Dutch Shell as Brent crude and West Texas Intermediate crude futures recovered.

Vodafone climbed after striking a deal to extend its strategic partnership with Russian mobile group MTS and expand its scope in Ukraine.

Rio Tinto rose as it reported increased production in the third quarter.

British American Tobacco edged up as it purchased the final necessary number of shares in Brazilian subsidiary Souza Cruz, the country's largest cigarette maker, to enable it to take the company private in coming months.

Market Movers

techMARK 3,034.95 +0.52%

FTSE 100 6,380.47 +0.66%

FTSE 250 17,016.50 +0.40%

FTSE 100 - Risers

Glencore (GLEN) 121.40p +3.10%

Shire Plc (SHP) 4,483.00p +2.47%

Tesco (TSCO) 196.65p +2.34%

BP (BP.) 388.40p +2.30%

Royal Dutch Shell 'A' (RDSA) 1,818.50p +2.22%

Capita (CPI) 1,264.00p +2.10%

Royal Dutch Shell 'B' (RDSB) 1,842.00p +2.08%

Sainsbury (J) (SBRY) 267.80p +1.90%

Prudential (PRU) 1,514.50p +1.88%

3i Group (III) 476.60p +1.84%

FTSE 100 - Fallers

Burberry Group (BRBY) 1,269.00p -2.53%

TUI AG Reg Shs (DI) (TUI) 1,214.00p -1.38%

Intertek Group (ITRK) 2,591.00p -0.92%

GKN (GKN) 278.30p -0.78%

Diageo (DGE) 1,820.50p -0.74%

Royal Mail (RMG) 450.20p -0.62%

Coca-Cola HBC AG (CDI) (CCH) 1,516.00p -0.59%

ARM Holdings (ARM) 974.00p -0.56%

Berkeley Group Holdings (The) (BKG) 3,211.00p -0.53%

Taylor Wimpey (TW.) 189.50p -0.52%

FTSE 250 - Risers

Provident Financial (PFG) 3,319.00p +4.44%

DCC (DCC) 5,145.00p +3.31%

Vedanta Resources (VED) 582.50p +3.10%

Tullow Oil (TLW) 255.00p +2.99%

Premier Oil (PMO) 88.90p +2.95%

Evraz (EVR) 96.70p +2.87%

AO World (AO.) 160.20p +2.82%

Kaz Minerals (KAZ) 139.00p +2.66%

Enterprise Inns (ETI) 108.20p +2.56%

FirstGroup (FGP) 100.50p +2.34%

FTSE 250 - Fallers

Bodycote (BOY) 534.50p -2.82%

IMI (IMI) 973.00p -2.46%

ICAP (IAP) 451.50p -2.40%

Weir Group (WEIR) 1,214.00p -2.25%

Electrocomponents (ECM) 208.10p -1.93%

Spire Healthcare Group (SPI) 380.00p -1.91%

Ted Baker (TED) 2,867.00p -1.71%

Computacenter (CCC) 747.50p -1.64%

Aggreko (AGK) 979.50p -1.36%

Indivior (INDV) 211.90p -1.35%

FTSE TechMARK - Risers

Filtronic (FTC) 7.50p +5.26%

NCC Group (NCC) 274.00p +2.81%

Dialight (DIA) 687.00p +2.54%

Oxford Biomedica (OXB) 7.46p +2.19%

E2V Technologies (E2V) 240.75p +1.58%

Sepura (SEPU) 172.50p +1.17%

KCOM Group (KCOM) 90.25p +0.56%

IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 204.00 +0.12%

FTSE TechMARK - Fallers

Spirent Communications (SPT) 75.75p -2.26%

Oxford Instruments (OXIG) 674.00p -1.75%

Consort Medical (CSRT) 930.50p -0.75%

SDL (SDL) 391.50p -0.25%