London open: Stocks drop on Greek fears, but miners rise on Chinese stimulus hopes

Mining stocks were shrugging off some gloomy economic data from China on Monday morning on hopes for further stimulus in Beijing, though the wider market was dragged into the red on the back of ongoing concerns about Greece.

London’s FTSE 100 was down 1% at 6,786 early on.

Greek prime minister Alexis Tsipras addressed parliament over the weekend, standing firm on his plans to ease austerity measures in his first major speech since taking his new role. "After five years of bailout barbarity, our people cannot take any more,” he said.

The comments came just days after Standard & Poor's downgraded Greece's credit rating by one notch and warned that the country's newly-elected government was running out of time to agree on a new financing programme with creditors.

“As both sides become more and more entrenched it’s only going to become more and more difficult to imagine a happy outcome, while this stand-off continues, with the likelihood of a Greece exit [from there Eurozone] increasing by the day,” said analyst Michael Hewson from CMC Markets.

In other news, the Chinese trade surplus unexpectedly ballooned to $60bn in January from $49.6bn the month before, as imports sank by an annual rate of 19.9%. Exports were also weak, falling by 3.3%.

The only other major economic data release of Monday’s session will be the Eurozone Sentix investor confidence index which is forecast to improve to 3.0 in February from 0.9 the month before.

Miners shrug off weak Chinese data

Fresnillo, Randgold, Antofagasata, Glencore, Anglo American, Rio Tinto and BHP Billiton all edged higher early on, showing that mining stocks were “holding up surprisingly well this morning” despite the weak trade figures from China, according to Mike van Dulken from Accendo Markets.

“While the news would normally see the natural resources focused names on the FTSE suffer, however, their relative buoyancy likely comes from expectations of more stimulus being forthcoming from Beijing (government or People’s Bank of China) in order to keep [economic] growth in the world’s #2 economy at a level markets are comfortable with,” he said.

Even Anglo American was rising despite revealing that its contribution to underlying profits from its platinum division in South Africa plummeted 92% in 2014 as a result of a five-month strike and lower metal prices. Meanwhile, Randgold was resilient after reporting a 17% drop in annual profits for last year, though it did hike its dividend payment by 20%.

Utility stocks were among the worst performers early on, with United Utilities, Severn Trent and National Grid falling sharply.

Natural gas producer BG Group edged higher after bringing forward the starting date of its new boss by one month. Statoil’s Helge Lund will join immediately, the company said.

Market Movers
techMARK 3,063.10 -1.00%
FTSE 100 6,785.99 -0.98%
FTSE 250 16,545.84 -0.84%

FTSE 100 - Risers
Fresnillo (FRES) 876.00p +1.86%
Randgold Resources Ltd. (RRS) 5,365.00p +1.04%
Antofagasta (ANTO) 708.50p +0.93%
Glencore (GLEN) 267.65p +0.85%
Anglo American (AAL) 1,153.50p +0.70%
BG Group (BG.) 938.20p +0.35%
Rio Tinto (RIO) 3,033.50p +0.17%
BHP Billiton (BLT) 1,506.00p +0.07%

FTSE 100 - Fallers
United Utilities Group (UU.) 955.00p -3.88%
Severn Trent (SVT) 2,034.00p -2.96%
ARM Holdings (ARM) 1,049.00p -2.78%
Shire Plc (SHP) 4,789.00p -2.50%
RSA Insurance Group (RSA) 443.20p -2.44%
Smiths Group (SMIN) 1,161.00p -2.19%
National Grid (NG.) 889.60p -2.17%
GKN (GKN) 372.00p -2.03%
Taylor Wimpey (TW.) 134.40p -1.97%
Intu Properties (INTU) 365.20p -1.93%

FTSE 250 - Risers
Polymetal International (POLY) 622.00p +6.32%
Kaz Minerals (KAZ) 238.50p +2.80%
Hunting (HTG) 511.00p +2.69%
Soco International (SIA) 303.60p +2.60%
Alent (ALNT) 371.90p +2.59%
Centamin (DI) (CEY) 68.00p +2.26%
Premier Oil (PMO) 165.80p +2.16%
Afren (AFR) 9.27p +1.76%
Supergroup (SGP) 1,038.00p +1.67%
Zoopla Property Group (WI) (ZPLA) 177.50p +1.37%

FTSE 250 - Fallers
Halma (HLMA) 671.00p -4.96%
Oxford Instruments (OXIG) 686.50p -3.38%
Nostrum Oil & Gas (NOG) 557.00p -2.79%
Euromoney Institutional Investor (ERM) 1,031.00p -2.37%
Hikma Pharmaceuticals (HIK) 2,413.00p -2.31%
Cranswick (CWK) 1,320.00p -2.29%
FirstGroup (FGP) 101.10p -2.22%
Melrose Industries (MRO) 265.10p -2.21%
IP Group (IPO) 240.80p -2.19%
Derwent London (DLN) 3,293.00p -2.14%