London open: FTSE rebounds after closing in bear market

The FTSE 100 rebounded on Thursday after closing in a bear market in the previous session as China’s central bank made an aggressive cash injection into the country’s financial system.

London’s top-tier index closed 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.

UK stocks were given a much needed boost in morning trading as the People’s Bank of China offered 400bn yuan worth of short-term loans to commercial lenders on Thursday through its open-market operations.

Meanwhile, oil prices remained under pressure with Brent crude down 0.90% to $27.63 per barrel and West Texas Intermediate down 0.71% to $28.15 per barrel.

“The slide in oil prices has been a significant boon for consumers in countries who are net importers of oil enjoying an energy premium, while sliding food prices has meant that the lack of wage growth, while disappointing, hasn’t as noticeable as it might ordinarily have been,” said Michael Hewson, chief market analyst at CMC Markets.

“Unfortunately there are downsides to all of this and the evidence is pretty much evident even here in the UK with job losses in the oil and gas sector as well as the steel industry, as the global economy battles with a significant problem of overcapacity, rather than a lack of demand.”

On Thursday’s economic calendar, 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, SABMiller declined as third quarter results were hit by the US dollar.

Royal Mail rallied as it delivered the goods in a strong Christmas period, with UK parcel volumes in December were 6% better than the year before, and 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.

St Jame’s Place edged higher after reporting a 14% rise in net inflows to £5.09bn. Retention of client funds was 95% and funds under management were up 13% for the year to £58.6bn

Market Movers

FTSE 100 (UKX) 5,686.74 0.23%
FTSE 250 (MCX) 15,720.35 0.51%
techMARK (TASX) 3,021.94 0.61%

FTSE 100 - Risers

Pearson (PSON) 719.50p 9.43%
Royal Mail (RMG) 436.60p 3.58%
Admiral Group (ADM) 1,660.00p 2.53%
Dixons Carphone (DC.) 438.70p 2.33%
Worldpay Group (WI) (WPG) 293.70p 2.05%
Schroders (SDR) 2,559.00p 1.91%
AstraZeneca (AZN) 4,313.00p 1.83%
Shire Plc (SHP) 4,191.00p 1.72%
Hikma Pharmaceuticals (HIK) 1,955.00p 1.72%
Diageo (DGE) 1,807.00p 1.66%

FTSE 100 - Fallers

SSE (SSE) 1,339.00p -3.32%
Rolls-Royce Holdings (RR.) 518.50p -2.35%
Compass Group (CPG) 1,111.00p -2.03%
Standard Chartered (STAN) 459.55p -1.60%
Centrica (CNA) 201.70p -1.13%
Royal Dutch Shell 'B' (RDSB) 1,263.50p -1.10%
Anglo American (AAL) 218.65p -1.09%
National Grid (NG.) 907.90p -1.08%
Severn Trent (SVT) 2,052.00p -1.01%
ITV (ITV) 251.80p -0.94%

FTSE 250 - Risers

Brown (N.) Group (BWNG) 319.70p 13.77%
Halfords Group (HFD) 357.00p 9.85%
Countrywide (CWD) 356.90p 7.53%
Ocado Group (OCDO) 276.90p 4.49%
Acacia Mining (ACA) 168.90p 4.39%
OneSavings Bank (OSB) 296.30p 4.33%
Man Group (EMG) 156.20p 3.99%
Ibstock (IBST) 204.00p 2.87%
Indivior (INDV) 154.60p 2.86%
Laird (LRD) 324.50p 2.53%

FTSE 250 - Fallers

Allied Minds (ALM) 239.00p -10.49%
Electra Private Equity (ELTA) 3,510.00p -1.98%
Ophir Energy (OPHR) 75.05p -1.77%
DFS Furniture (DFS) 305.00p -1.71%
Sophos Group (SOPH) 230.70p -1.41%
PZ Cussons (PZC) 266.60p -1.41%
Wood Group (John) (WG.) 550.00p -1.26%
Nostrum Oil & Gas (NOG) 297.80p -1.19%
Aveva Group (AVV) 1,319.00p -1.12%
Lookers (LOOK) 154.60p -1.09%