London open: Stocks gain as China hints at further stimulus

London stocks were sitting higher on Tuesday after the Chinese government hinted at further stimulus.

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, a touch higher than consensus forecasts for a reading of +1.

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 in morning trade from the previous day’s lows. Brent crude rose 0.6% to $36.60 per barrel and West Texas Intermediate increased 1.05% to $36.19 per barrel at 0900 GMT.

However, metal prices reversed Monday gains with gold, silver and copper down 0.26%, 0.35% and 0.54% respectively on the Comex.

Still to come, UK public finance figures will be released at 0930 GMT while 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 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. Economists have pencilled in 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 (AIF) from Britel Fund Trustees Limited for £15.4m in cash, reflecting a price per unit of 0.4869p.

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

Market Movers

FTSE 100 (UKX) 6,082.39 0.79%
FTSE 250 (MCX) 17,167.56 0.53%
techMARK (TASX) 3,169.41 0.67%

FTSE 100 - Risers

BG Group (BG.) 925.50p 2.86%
Johnson Matthey (JMAT) 2,652.00p 1.92%
Standard Chartered (STAN) 559.20p 1.86%
Barclays (BARC) 220.20p 1.76%
BP (BP.) 340.80p 1.67%
Old Mutual (OML) 175.30p 1.56%
Berkeley Group Holdings (The) (BKG) 3,613.00p 1.52%
Royal Dutch Shell 'A' (RDSA) 1,463.50p 1.49%
ARM Holdings (ARM) 1,039.00p 1.46%
Royal Dutch Shell 'B' (RDSB) 1,471.50p 1.45%

FTSE 100 - Fallers

Marks & Spencer Group (MKS) 442.20p -1.21%
ITV (ITV) 269.00p -0.92%
Sainsbury (J) (SBRY) 257.60p -0.77%
Admiral Group (ADM) 1,631.00p -0.24%
Randgold Resources Ltd. (RRS) 4,059.00p -0.22%
Inmarsat (ISAT) 1,096.00p -0.18%
Next (NXT) 7,210.00p -0.14%
United Utilities Group (UU.) 921.50p -0.11%
Centrica (CNA) 210.00p -0.10%
Relx plc (REL) 1,163.00p -0.00%

FTSE 250 - Risers

Ophir Energy (OPHR) 88.95p 2.71%
Tullow Oil (TLW) 159.50p 2.31%
Hays (HAS) 144.40p 2.19%
Cairn Energy (CNE) 141.20p 1.95%
Bovis Homes Group (BVS) 979.00p 1.82%
Woodford Patient Capital Trust (WPCT) 101.00p 1.81%
Vedanta Resources (VED) 267.70p 1.79%
Edinburgh Inv Trust (EDIN) 715.50p 1.78%
Weir Group (WEIR) 955.00p 1.70%
Virgin Money Holdings (UK) (VM.) 383.20p 1.62%

FTSE 250 - Fallers

Jimmy Choo (CHOO) 121.80p -2.01%
Domino's Pizza Group (DOM) 1,012.00p -1.84%
JD Sports Fashion (JD.) 1,008.00p -1.37%
Entertainment One Limited (ETO) 166.80p -1.36%
Halfords Group (HFD) 330.00p -1.26%
Fidessa Group (FDSA) 1,983.00p -1.10%
DFS Furniture (DFS) 334.30p -1.07%
Supergroup (SGP) 1,696.00p -1.05%
Enterprise Inns (ETI) 104.40p -0.95%
Zoopla Property Group (WI) (ZPLA) 233.40p -0.93%