London open: UK stocks rise as corporate updates impress

A decent rally on Wall Street and gains on Asian markets led to a positive start for UK stocks on Wednesday, helped by well-received updates from a number of blue chips.

The FTSE 100 was up 0.4% at 6,646, with trading statements from Pearson, Dixons Carphone and SABMiller impressing investors early on.

The index closed at 6,620.10 on Tuesday, its best finish since 29 December 2014.

A barrage of economic data from China on Tuesday came in better than expectations, helping markets in the US and Asia to shrug off a downgrade to growth forecasts by the International Monetary Fund.

The annual rate of fourth-quarter Chinese gross domestic product (GDP) expansion held steady at 7.3% despite expectations for a slowdown, while growth in industrial production and retail sales picked up.

As for Wednesday’s session, labour-market figures are due out in the UK, along with the minutes of the latest Bank of England policy meeting. Building permits and housing starts are scheduled for release in the States.

However, the upcoming European Central Bank (ECB) meeting on Thursday is the main ‘risk event’ of the week on the back of increased hopes that policymakers will implement full-on quantitative easing (QE).

“The gains in stocks are mainly due to a combination of the China GDP coming in above market expectations and of course, the rising anticipation that the ECB will finally press the QE button tomorrow,” said Jameel Ahmad, analyst at FXTM.

Pearson, Dixons Carphone and SABMiller on the rise

FT and education publisher Pearson rose strongly after guiding to higher profits in 2015 as it maintained its forecast for results last year. Adjusted earnings per share should rise to 75p-80p this year, compared with an estimated 66p in 2014.

Dixons Carphone was also in positive territory after raising its profit guidance on the back of strong Christmas trading. Like-for-like sales increased 7% for the nine weeks ended 3 January as the group took further market share across electricals and mobile in the UK and Ireland, the Nordics and Greece.

Despite more difficult trading conditions in China and North America, SABMiller’s shares rose after the drinks group registered a 4% increase in group net producer revenue in the third quarter.

However, Sports Direct was a heavy faller after the news that founder Mike Ashley had sold £117-worth of shares in the sports retailer equal to a 2.6% stake.

Takeover target Afren was a heavy faller after the news after the close that it has been reviewing its “capital structure, liquidity and funding requirements” and looking at its cost base and spending plans for 2015 given the recent rapid plunge in oil prices. Afren on Monday extended a ‘put up or shut up’ deadline for potential bidder Seplat to make an offer until 30 January.

Mining stocks were mostly lower, including BHP Billiton despite the company maintaining its full-year production guidance after a 9% increase in output in the first half, helped by record volumes across eight operations and five commodity classes. However, BHP also said it has “moved quickly” in response to the recent collapse in crude prices and plans to reduce the number of US onshore oil rigs by 40% by the end of the financial year.

Sector peers such as Anglo American, Rio Tinto and Glencore were also unwanted.

Market Movers
techMARK 3,041.65 +0.37%
FTSE 100 6,645.86 +0.39%
FTSE 250 16,121.00 -0.03%

FTSE 100 - Risers
Pearson (PSON) 1,276.00p +3.24%
SABMiller (SAB) 3,412.00p +2.06%
Admiral Group (ADM) 1,438.00p +1.55%
Intu Properties (INTU) 354.40p +1.40%
BG Group (BG.) 860.80p +1.35%
Unilever (ULVR) 2,748.00p +1.29%
Imperial Tobacco Group (IMT) 2,985.00p +1.29%
Burberry Group (BRBY) 1,724.00p +1.23%
Royal Dutch Shell 'B' (RDSB) 2,199.50p +1.08%
British American Tobacco (BATS) 3,650.00p +1.07%

FTSE 100 - Fallers
Intertek Group (ITRK) 2,274.00p -4.65%
Sports Direct International (SPD) 726.00p -4.54%
Weir Group (WEIR) 1,610.00p -3.82%
Kingfisher (KGF) 332.00p -1.37%
Babcock International Group (BAB) 1,017.00p -1.07%
Smiths Group (SMIN) 1,067.00p -0.93%
St James's Place (STJ) 810.00p -0.92%
Johnson Matthey (JMAT) 3,450.00p -0.86%
Anglo American (AAL) 1,112.00p -0.85%
Royal Bank of Scotland Group (RBS) 377.40p -0.81%

FTSE 250 - Risers
Man Group (EMG) 169.60p +5.02%
FirstGroup (FGP) 105.00p +2.94%
Rank Group (RNK) 161.90p +2.47%
Fidelity China Special Situations (FCSS) 140.00p +2.19%
Indivior (INDV) 165.00p +1.79%
Nostrum Oil & Gas (NOG) 484.70p +1.79%
Interserve (IRV) 516.50p +1.77%
Centamin (DI) (CEY) 70.30p +1.74%
Pets at Home Group (PETS) 206.40p +1.73%
Hellermanntyton Group (HTY) 312.60p +1.69%

FTSE 250 - Fallers
Afren (AFR) 22.76p -11.75%
Poundland Group (PLND) 345.40p -4.90%
Vedanta Resources (VED) 413.40p -3.86%
Domino's Pizza Group (DOM) 676.00p -3.22%
Drax Group (DRX) 352.20p -2.87%
Bank of Georgia Holdings (BGEO) 1,878.00p -2.59%
Wetherspoon (J.D.) (JDW) 798.00p -2.56%
Dechra Pharmaceuticals (DPH) 845.00p -2.31%
Game Digital (GMD) 244.70p -2.20%
Ophir Energy (OPHR) 123.00p -2.15%