London open: Stocks set new record as Chinese slowdown fuels stimulus hopes

UK stocks reached a new all-time high on Wednesday morning as a raft of weak economic figures from China gave shares in the heavyweight mining sector a boost on hopes of further stimulus from Beijing.

Chinese economic growth slowed to a six-year low, while growth in fixed-asset investment, industrial production and retail sales all eased, further ramping up the pressure on policymakers to act.

The FTSE 100 was trading 0.38% higher at 7,101.87, having touched a new peak of 7,111.61 in morning trade. That surpassed the previous intraday all-time high of 7,095.36 reached last Friday.

Chinese gross domestic product expanded at an annual rate of just 7% in the first quarter of 2015, in line with estimates but down from 7.4% growth in the fourth quarter. This was the slowest rate of expansion since 2009 on the back of weakness in the property and manufacturing sectors.

Analysts at Danske Bank said growth could dip below the 7% rate targeted by the Chinese government in the second quarter. "With the government's growth target already challenged, the implications are that there will be more monetary easing and probably also some additional fiscal easing," they said.

Other Chinese data for March also released overnight showed that annual growth in fixed-asset investment slowed from 13.9% to 13.5%, industrial production from 6.8% to 6.4% and retail sales from 11.9% to 10.2%. All three indicators came in worse than forecast.

The European Central Bank (ECB) meeting at 12:45 and subsequent press conference at 13:30 are likely to keep market participants busy, with investors awaiting an update on how the ECB's quantitative easing programme is going.

Mining stocks edge higher

Following on from a strong performance on Tuesday, mining stocks were mostly higher early on due to hopes of Chinese stimulus. Anglo American, BHP Billiton, Glencore and Rio Tinto were all making gains.

Mexican precious metals producer Fresnillo was also in demand after making an impressive start to 2015 with both silver and gold output up significantly over last year, putting the company on track to hit its annual targets.

Next raced up the FTSE 100 index after JPMorgan lifted its rating on the high street retailer to ‘overweight’ from ‘neutral’, saying it sees scope for shares to recover some of its recent underperformance (stock down 13% year-to-date) between now and its upcoming trading update on 29 April.

Astrazeneca was higher after giving US regulatory updates on two pipeline products, with an encouraging review for a pair of diabetes treatments and granting of 'orphan drug' status for a cancer treatment that should ease its path to marketing approval.

High end fashion label Burberry also edged higher after strong demand for its iconic heritage trench coats and scarves helped second-half revenues rise 9%.

Business supplies distributor Bunzl underwhelmed after saying trading in the first quarter was in line with expectations with revenues up 6%.

Market Movers
techMARK 3,264.47 +0.20%
FTSE 100 7,101.87 +0.38%
FTSE 250 17,865.32 +0.04%

FTSE 100 - Risers
Next (NXT) 7,295.00p +2.60%
Ashtead Group (AHT) 1,137.00p +2.25%
AstraZeneca (AZN) 4,885.00p +1.77%
Dixons Carphone (DC.) 443.90p +1.70%
Smiths Group (SMIN) 1,142.00p +1.60%
Glencore (GLEN) 298.00p +1.59%
Weir Group (WEIR) 1,908.00p +1.49%
Fresnillo (FRES) 733.00p +1.45%
Royal Dutch Shell 'B' (RDSB) 2,114.00p +1.34%
Sports Direct International (SPD) 654.00p +1.32%

FTSE 100 - Fallers
Bunzl (BNZL) 1,885.00p -1.31%
SSE (SSE) 1,545.00p -1.21%
Reed Elsevier (REL) 1,156.00p -1.11%
Severn Trent (SVT) 2,150.00p -1.01%
Aberdeen Asset Management (ADN) 489.80p -0.81%
Hikma Pharmaceuticals (HIK) 2,207.00p -0.81%
Admiral Group (ADM) 1,579.00p -0.75%
National Grid (NG.) 899.20p -0.73%
easyJet (EZJ) 1,859.00p -0.64%
Reckitt Benckiser Group (RB.) 6,055.00p -0.59%

FTSE 250 - Risers
JD Sports Fashion (JD.) 537.00p +5.40%
Premier Oil (PMO) 171.90p +3.87%
Ophir Energy (OPHR) 166.90p +3.66%
Kaz Minerals (KAZ) 235.90p +2.65%
Amec Foster Wheeler (AMFW) 938.00p +1.96%
Tullow Oil (TLW) 375.80p +1.95%
Home Retail Group (HOME) 174.80p +1.81%
Enterprise Inns (ETI) 118.50p +1.54%
Jupiter Fund Management (JUP) 441.60p +1.47%
Infinis Energy (INFI) 187.20p +1.46%

FTSE 250 - Fallers
Virgin Money Holdings (UK) (VM.) 398.40p -5.59%
Vesuvius (VSVS) 472.60p -5.57%
Indivior (INDV) 217.20p -3.25%
Diploma (DPLM) 823.50p -1.96%
Soco International (SIA) 193.70p -1.87%
Riverstone Energy Limited (RSE) 1,065.00p -1.84%
Euromoney Institutional Investor (ERM) 1,130.00p -1.74%
Hellermanntyton Group (HTY) 334.90p -1.38%
Jimmy Choo (CHOO) 171.50p -1.38%
Vedanta Resources (VED) 550.50p -1.34%