London midday: Stocks rise on China stimulus hopes, UK consumer confidence

The FTSE 100 rose on Tuesday after the Chinese government hinted at further stimulus and a report showed an increase in UK consumer confidence.

China’s government said that monetary policy must be more “flexible” and more “forceful”, according to a statement released after the Central Economic Work Conference by Xinhua News Agency on Monday. The news comes as concerns mount over China's economic slowdown.

In another boost to the market, a report showed UK consumer confidence improved in December. GfK’s sentiment index increased one point to +2 this month during the festive season, a touch higher than consensus forecasts for a reading of +1.

“Looking ahead, we continue to think that a snap-back in inflation, slowing job gains and rising interest rates will put consumers in a more morose mood next year,” said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

In Germany, GfK’s consumer confidence index rose to 9.4 in January from 9.3 the previous month, surprising analysts who had expected no change.

It was also positive for the oil sector with prices rebounding from the previous day’s lows. Brent crude rose 0.19% to $36.42 per barrel and West Texas Intermediate increased 0.4% to $35.97 per barrel at 1130 GMT.

However, metal prices reversed Monday gains with gold, silver and copper down 0.33%, 0.28% and 0.75% respectively on the Comex.

Meanwhile, UK public sector borrowing rose £1.3bn to £14.2bn in November from the same month last year, according to data released by the Office for National Statistics. The figure was far higher than the £11.8bn economists had been expecting.

Looking ahead, the US sees the release of the final estimate of third quarter gross domestic product at 1330 GMT.

Analysts expect the third and final estimate of real US GDP was lowered to an annualised 1.9% in the third quarter from the second estimate of 2.1%. GDP grew 3.9% in the second quarter.

The personal consumption expenditure price index, released at 1330 GMT, is forecast to show a 1.3% increase year-on-year in the third quarter, unchanged from the previous month. The PCE index is the Federal Reserve’s preferred measure of inflation. The US central bank is targeting inflation of about 2%.

US existing home sales figures are due at 1500 GMT, with analysts expecting a 0.4% drop in November from a month earlier, compared to a 3.4% fall in October.

Company wise, oil producers rallied as prices picked up. BG Group, BP, Royal Dutch Shell, Ophir Energy and Tullow Oil were among the top risers.

Hansteen Holdings gained after buying a further 31.6m units in the Ashtenne Industrial Fund from Britel Fund Trustees Limited for £15.4m in cash.

ITV headed south after rising on Monday amid speculation that it could be a takeover target.

Market Movers

FTSE 100 (UKX) 6,071.50 0.61%
FTSE 250 (MCX) 17,117.65 0.24%
techMARK (TASX) 3,156.66 0.26%

FTSE 100 - Risers

Anglo American (AAL) 289.15p 3.08%
BG Group (BG.) 923.30p 2.61%
Royal Dutch Shell 'A' (RDSA) 1,473.00p 2.15%
BP (BP.) 342.40p 2.15%
Royal Dutch Shell 'B' (RDSB) 1,480.00p 2.03%
Barclays (BARC) 220.70p 1.99%
Old Mutual (OML) 176.00p 1.97%
Standard Chartered (STAN) 559.60p 1.93%
Berkeley Group Holdings (The) (BKG) 3,620.00p 1.71%
Carnival (CCL) 3,784.00p 1.67%

FTSE 100 - Fallers

Marks & Spencer Group (MKS) 440.50p -1.59%
ITV (ITV) 267.20p -1.58%
Reckitt Benckiser Group (RB.) 6,044.00p -1.02%
Tesco (TSCO) 144.05p -0.86%
RSA Insurance Group (RSA) 425.00p -0.77%
Ashtead Group (AHT) 1,087.00p -0.73%
TUI AG Reg Shs (DI) (TUI) 1,213.00p -0.66%
InterContinental Hotels Group (IHG) 2,575.00p -0.62%
Whitbread (WTB) 4,369.00p -0.57%
Merlin Entertainments (MERL) 439.50p -0.52%

FTSE 250 - Risers

Amec Foster Wheeler (AMFW) 408.20p 4.11%
Drax Group (DRX) 236.80p 3.05%
Evraz (EVR) 66.60p 2.94%
Centamin (DI) (CEY) 64.25p 2.88%
Vedanta Resources (VED) 270.50p 2.85%
Acacia Mining (ACA) 171.90p 2.81%
Investec (INVP) 480.50p 2.67%
Riverstone Energy Limited (RSE) 767.50p 2.20%
Weir Group (WEIR) 957.50p 1.97%
Rathbone Brothers (RAT) 2,209.00p 1.80%

FTSE 250 - Fallers

Card Factory (CARD) 369.40p -2.40%
Ocado Group (OCDO) 330.50p -2.39%
Halfords Group (HFD) 326.30p -2.36%
Poundland Group (PLND) 203.00p -2.26%
JD Sports Fashion (JD.) 999.50p -2.20%
OneSavings Bank (OSB) 346.90p -2.12%
Wizz Air Holdings (WIZZ) 1,759.00p -1.95%
Spire Healthcare Group (SPI) 282.00p -1.84%
DFS Furniture (DFS) 332.50p -1.60%
Domino's Pizza Group (DOM) 1,016.00p -1.45%