London midday: Stocks rebound after bear market close

UK stocks gained on Thursday, reversing declines in the previous day’s trading and bucking the trend in Asia’s equity markets.

The FTSE 100 closed in a bear market at 5,673.58 on Wednesday, down 3.46% on the day and more than 20% below its previous peak of 7103.98 on 27 April 2015. A bear market occurs when equities drop at least 20% from a recent peak.

London’s top-tier index rebounded on Thursday as investors shrugged off declines in Asia. Japan’s Nikkei index closed down 2.43%, continuing its drop after ending in a bear market on Wednesday as Bank of Japan Governor Haruhiko Kuroda said on Thursday he wasn’t considering adopting a negative interest rate policy to boost the economy.

Hong Kong’s Hang Seng index and the Shanghai Composite were also in the red amid fears over the slowdown in China’s economy.

The People’s Bank of China offered 400bn yuan worth of short-term loans to commercial lenders on Thursday through its open-market operations.

“The moves have more to do with offsetting the usual spike in liquidity demand ahead of Chinese New Year than a response to capital outflows or an attempt at monetary easing,” according to Capital Economics.

Meanwhile, oil prices remained under pressure on worries about an oversupplied market, further aggravated by news that Iran will lift production after sanctions were lifted. Brent crude fell 0.75% to $27.67 per barrel and West Texas Intermediate decreased 1.07% to $28.05 per barrel at 1150 GMT.

In the Eurozone, the European Central Bank releases its latest policy decision at 1245 GMT and President Mario Draghi holds a press conference at 1330 GMT.

The ECB is expected to keep all key rates unchanged and make no changes to its asset purchase programme amid low inflation, weak global growth, geopolitical tensions and slowing demand for Eurozone exports.

Stateside, the Labor Department’s initial jobless claims report will be published at 1330 GMT.

In company news, Royal Mail rallied as it delivered the goods in a strong Christmas period, with UK parcel volumes in December 6% better than the year before. The group also said it was on track to reduce UK parcel costs by at least 1% for the full year.

Pearson jumped despite warning that full year profit would be below forecasts as it undergoes a new restructuring.

BHP Billion rebounded despite UBS saying it expects the miner will cut its dividend after being mauled by a combination of one-off costs, impairment charges and commodity prices at multi-year lows.

Laird was a high riser after saying it expected full year earnings to be in line with expectations and consistent with its third quarter trading update as 2015 revenues rose.

ITV declined after UBS initiated of the stock at ‘sell’ with a price target of 230p as it began covering the European broadcasting sector.

Polymetal slumped after saying 2015 gold production fell 9% to 861,000 ounces, while silver production rose 12% to 32.1m ounces.

B&Q owner Kingfisher got a boost as Bank of America Merrill Lynch upgraded the stock to ‘buy’ from ‘neutral’.

Countrywide advanced after saying it had an “encouraging performance” in the fourth quarter of the year, but current housing market trends have had an impact.

Acacia Mining rose after it said gold production nudged up in 2015 and announced plans to raise guidance for this year following the ramp-up of the flagship Bulyanhulu mine.

Premier Foods edged lower after reporting a drop in branded sales over Christmas, driven by mild winter weather and a decision to reduce promotional activity on some products.

Market Movers

FTSE 100 (UKX) 5,697.77 0.43%
FTSE 250 (MCX) 15,652.16 0.07%
techMARK (TASX) 3,012.91 0.31%

FTSE 100 - Risers

Pearson (PSON) 750.50p 14.14%
BHP Billiton (BLT) 601.70p 3.58%
Royal Mail (RMG) 435.20p 3.25%
Kingfisher (KGF) 335.90p 3.13%
Rio Tinto (RIO) 1,621.50p 2.79%
Glencore (GLEN) 73.08p 2.64%
Antofagasta (ANTO) 355.10p 2.60%
Fresnillo (FRES) 656.50p 2.50%
Admiral Group (ADM) 1,658.00p 2.41%
Randgold Resources Ltd. (RRS) 4,506.00p 2.04%

FTSE 100 - Fallers

Compass Group (CPG) 1,090.00p -3.88%
SSE (SSE) 1,338.00p -3.39%
Berkeley Group Holdings (The) (BKG) 3,371.00p -2.77%
Sports Direct International (SPD) 393.80p -2.50%
Taylor Wimpey (TW.) 176.20p -1.89%
DCC (DCC) 4,891.00p -1.65%
Merlin Entertainments (MERL) 396.60p -1.54%
InterContinental Hotels Group (IHG) 2,179.00p -1.45%
Rolls-Royce Holdings (RR.) 524.00p -1.32%
Prudential (PRU) 1,304.00p -1.29%

FTSE 250 - Risers

Brown (N.) Group (BWNG) 319.10p 13.56%
Halfords Group (HFD) 354.20p 8.98%
Acacia Mining (ACA) 172.60p 6.67%
OneSavings Bank (OSB) 301.70p 6.23%
Countrywide (CWD) 350.40p 5.57%
Ocado Group (OCDO) 276.70p 4.42%
BBA Aviation (BBA) 155.90p 3.79%
Poundland Group (PLND) 150.30p 3.66%
Hastings Group Holdings (HSTG) 160.30p 3.42%
Zoopla Property Group (WI) (ZPLA) 208.10p 2.97%

FTSE 250 - Fallers

Marshalls (MSLH) 276.10p -4.66%
Home Retail Group (HOME) 133.50p -4.64%
Electra Private Equity (ELTA) 3,422.00p -4.44%
Clarkson (CKN) 1,995.00p -3.39%
Sophos Group (SOPH) 227.00p -2.99%
Allied Minds (ALM) 260.00p -2.62%
Redrow (RDW) 399.90p -2.51%
Lookers (LOOK) 152.70p -2.30%
Aveva Group (AVV) 1,304.00p -2.25%
Vedanta Resources (VED) 208.20p -2.16%