London open: Stocks rise ahead of busy week with ECB in focus

UK stocks rose on Monday morning ahead of a busy week, as investors shrugged off a sell-off on Chinese markets overnight.

London’s FTSE 100 was up 0.4% at 6,577 in early deals.

Stocks in Shanghai plunged 8% on Monday with shares in the financial sectors faring the worst after securities regulators said many brokerage firms had broken stricter rules on margin trading. A number of brokers, including Citic Securities and Hating Securities, were banned from opening new customer accounts for three months because of the violations.

Margin finance involves the borrowing of money to buy stocks, something which the government is concerned will lead to instability. Record margin lending has resulted in a 63% surge in equity values over the past six months.

Despite the sell-off in China, European markets experienced a positive start to a busy week full of economic data, though the European Central Bank (ECB) meeting on Thursday will undoubtedly garner the most attention.

In response to the Eurozone falling into deflation last month, the ECB is widely expected to implement full-blown quantitative easing (QE) with the purchase of government bonds.

Analysts at Deutsche Bank said the ECB meeting could be “monumental”: “The big debate in the market as the decision nears will probably be based around whether it would be more positive to see a bigger size of QE announced but with each member central bank technically responsible for the losses or a smaller size where any future losses were fully mutualised.”

Elsewhere, there will be a barrage of economic data from China over the coming days, including growth estimates for the fourth quarter, UK employment figures and the Bank of England minutes, and manufacturing surveys in the Eurozone.

Monday’s agenda is thin on the ground of economic data with the US markets closed for Martin Luther King Jr. Day.

Greene King gives mixed update, Balfour wins contract

Pub operator and brewer Greene King was flat after saying that while sales over the key Christmas period was “encouraging”, trading before and after the festive season was mixed. Chief executive Rooney Anand said: “Outside of those [Christmas] weeks, trading was more volatile, with the weeks before Christmas slightly down on the previous year and soft trading since the New Year.”

Infrastructure firm Balfour Beatty rose after having been appointed sole contractor to a new £1.5bn framework that will run until February 2019. The national framework is operated by public sector-owned environment specialist Scape Group.

Steel-maker Evraz edged lower after saying its production of steel products rose by 6% in the last three months of 2014, driven by higher exports of export billets and slabs. However, for all of fiscal year 2014 consolidated steel production and output of steel products, net of rolled volumes, decreased by 4% and 5%, respectively.

Mining stocks on the whole were in the red, with heavyweights Rio Tinto, Anglo American and BHP Billiton falling slightly.

Takeover target Afren was weaker as investors nervously awaited a deadline for Nigerian group Seplat to return to the table with a possible offer. The latter approached the FTSE 250 oil group last month about a potential tie-up and has until 17:00 on Monday to ‘put up or shut up’, according to takeover rules.

Market Movers
techMARK 3,015.80 +0.69%
FTSE 100 6,577.24 +0.41%
FTSE 250 16,006.30 +0.53%

FTSE 100 - Risers
Tesco (TSCO) 225.55p +2.97%
Aggreko (AGK) 1,575.00p +2.27%
Travis Perkins (TPK) 1,823.00p +2.19%
Dixons Carphone (DC.) 436.00p +1.99%
Coca-Cola HBC AG (CDI) (CCH) 1,096.00p +1.76%
Babcock International Group (BAB) 1,025.00p +1.69%
Vodafone Group (VOD) 231.15p +1.47%
GKN (GKN) 361.10p +1.46%
BT Group (BT.A) 414.90p +1.42%
CRH (CRH) 1,528.00p +1.33%

FTSE 100 - Fallers
Rio Tinto (RIO) 2,855.50p -1.14%
BP (BP.) 410.50p -0.69%
Anglo American (AAL) 1,092.00p -0.68%
BHP Billiton (BLT) 1,379.50p -0.61%
Ashtead Group (AHT) 1,040.00p -0.48%
BG Group (BG.) 848.90p -0.42%
Weir Group (WEIR) 1,680.00p -0.41%
British American Tobacco (BATS) 3,569.50p -0.40%
Intertek Group (ITRK) 2,342.00p -0.38%
Randgold Resources Ltd. (RRS) 5,370.00p -0.37%

FTSE 250 - Risers
Bwin.party Digital Entertainment (BPTY) 108.80p +3.62%
Hikma Pharmaceuticals (HIK) 2,268.00p +2.49%
Ophir Energy (OPHR) 128.60p +2.47%
Hays (HAS) 148.00p +2.42%
Interserve (IRV) 518.50p +2.17%
Playtech (PTEC) 664.50p +2.15%
Diploma (DPLM) 759.00p +2.15%
Premier Oil (PMO) 143.50p +2.06%
Lonmin (LMI) 175.60p +2.03%
esure Group (ESUR) 227.50p +2.02%

FTSE 250 - Fallers
Fidelity China Special Situations (FCSS) 133.00p -5.27%
Afren (AFR) 28.37p -4.48%
Synthomer (SYNT) 230.20p -4.08%
Vedanta Resources (VED) 391.50p -3.43%
COLT Group SA (COLT) 127.30p -2.00%
Jimmy Choo (CHOO) 170.60p -1.16%
Redefine International (RDI) 54.50p -0.91%
Card Factory (CARD) 277.20p -0.82%
Galliford Try (GFRD) 1,210.00p -0.82%
Derwent London (DLN) 3,144.00p -0.66%