London midday: UK stocks rise, but gains only modest after sell-off

Stimulus hopes in China gave UK stocks a small boost on Wednesday though sentiment was still fragile after a global equity rout sent London’s stock market to a one-month low the previous session.

The FTSE 100 was up just 0.1% at 6,539. The index dropped over 2% to settle at 6,529.47 on Tuesday, its lowest finish since 5 November.

“While European markets are paring losses from earlier in the week on Wednesday, US futures are pointing back to the downside ahead of the open reflecting the more risk averse attitude in the markets this week,” said analyst Craig Erlam from Alpari.

Stock futures on Wall Street were inching lower in pre-market trade with investors continuing to show caution after recent all-time highs for the Dow Jones and S&P 500 benchmark indices.

Political uncertainty in Greece and concerns about lending in China hammered market sentiment on Tuesday with the Athens and Shanghai equity indices closing down 11% and 5% respectively.

While Greek stocks were still under pressure on Wednesday, Chinese markets rebounded on hopes that weak inflation figures may prompt Beijing to stimulate the economy.

Data out overnight showed that Chinese inflation fell to a five-year low of 1.4% in November, down from 1.6% in October and under analysts’ estimates for no change. Meanwhile, factory-gate deflation worsened to 11.6%.

Head of research Mike van Dulken from Accendo Markets said the figures were “adding to global growth worries but reviving hopes of more stimulus being forthcoming from the government/People’s Bank of China to help kick-start inflation/gross domestic product, offsetting yesterday’s fears of tighter Chinese lending rules crimping growth”.

According to Bloomberg, China has reportedly already injected money into the interbank market through the nation’s development bank, Cai Feng.

Ashtead impresses with H1, Rolls-Royce gains

Shares in Ashtead surged after the equipment-rental firm reported a big jump in first-half profits and lifted its full-year forecast. The company said that underlying pre-tax profit jumped by 33% to a record £265.5m in the six months to 31 October, and guided to full-year results “ahead of our previous expectations”.

Rolls-Royce gained after announcing a £1bn share buyback following the competition of the sale of its energy gas turbine and compressor business to Siemens.

Airline peers IAG, Easyjet, Fastjet and Ryanair were performing well after the IATA lifted its forecast for profits across the global airline industry for this year to a record $19.9bn.

Asset manager Aberdeen was lower after a Citigroup downgrade to ‘neutral’, while Shell’s shares were weighed down by a ratings cut by Deutsche Bank to ‘hold’.

Banking group Standard Chartered declined on the news that it will face a further three years of being under scrutiny from US authorities, after it was fined more than £400m in 2012 for breaching American sanctions on Iran.

Natural gas giant BG Group was lower despite saying it is set to raise $5bn from the sale of a gas pipeline in Australia which is planned to go towards reducing debt and future growth investments.

A return to sales growth towards the end of the third quarter at N Brown pleased the market, with the home-shopping retailer rising strongly.

Outsourcer Serco, which announced a new five-year contract in Australia, was also being lifted by reports that the company is in talks with turnaround investor Rutland Partners about seeing its waste-services division. According to Sky News, the disposal will be part of chief executive Rupert Soames’ restructuring programme.

Market Movers
techMARK 2,919.03 +0.43%
FTSE 100 6,538.92 +0.14%
FTSE 250 15,831.61 +0.75%

FTSE 100 - Risers
Ashtead Group (AHT) 1,167.00p +8.36%
Tullow Oil (TLW) 404.10p +3.54%
Mondi (MNDI) 1,077.00p +2.87%
Fresnillo (FRES) 753.50p +2.80%
ARM Holdings (ARM) 967.50p +2.60%
London Stock Exchange Group (LSE) 2,208.00p +2.46%
Rolls-Royce Holdings (RR.) 881.00p +2.38%
Carnival (CCL) 2,771.00p +1.91%
International Consolidated Airlines Group SA (CDI) (IAG) 466.40p +1.83%
Hargreaves Lansdown (HL.) 949.50p +1.82%

FTSE 100 - Fallers
TUI Travel (TT.) 431.30p -2.69%
GlaxoSmithKline (GSK) 1,384.00p -1.77%
Burberry Group (BRBY) 1,644.00p -1.50%
Petrofac Ltd. (PFC) 731.00p -1.48%
Royal Dutch Shell 'B' (RDSB) 2,126.50p -1.30%
BG Group (BG.) 887.20p -1.29%
Glencore (GLEN) 308.20p -1.20%
Royal Dutch Shell 'A' (RDSA) 2,061.00p -1.13%
Standard Chartered (STAN) 935.00p -0.98%
Aberdeen Asset Management (ADN) 440.50p -0.97%

FTSE 250 - Risers
Brown (N.) Group (BWNG) 349.90p +6.97%
Serco Group (SRP) 171.80p +4.56%
Vesuvius (VSVS) 439.30p +3.29%
Beazley (BEZ) 278.40p +3.11%
Bwin.party Digital Entertainment (BPTY) 109.90p +3.10%
IG Group Holdings (IGG) 680.50p +3.03%
Just Retirement Group (JRG) 144.00p +2.86%
Euromoney Institutional Investor (ERM) 1,037.00p +2.67%
Polymetal International (POLY) 610.50p +2.60%
Smith (DS) (SMDS) 311.30p +2.57%

FTSE 250 - Fallers
Stagecoach Group (SGC) 376.20p -7.66%
Micro Focus International (MCRO) 1,070.00p -5.39%
Centamin (DI) (CEY) 50.45p -1.85%
EnQuest (ENQ) 40.27p -1.66%
Ferrexpo (FXPO) 65.15p -1.59%
Fenner (FENR) 222.40p -1.51%
Hunting (HTG) 529.50p -1.49%
IP Group (IPO) 208.90p -1.42%
Diploma (DPLM) 760.00p -1.17%
Kaz Minerals (KAZ) 246.10p -1.16%