London pre-open: Stocks seen higher after China inflation data

Stocks in London were set for a firmer open on Friday following the release of encouraging Chinese inflation data.

The FTSE 100 was called to open 28 points higher than Thursday’s close at 7,005.

CMC Markets’ Michael Hewson said: “In an encouraging sign this morning’s Chinese CPI data does appear to show that inflation is gaining traction, with CPI coming in at 1.9%, above expectations. Factory gate prices still remain sluggish, though they have finally made it into positive territory at 0.1%, the first time that has happened since February 2012.

“Chinese PPI prices have been slowly improving for several months now so this return to positive territory is welcome news, especially so when prices were -5.9% at the beginning of this year.”

On the economic calendar, UK construction output and the Bank of England credit conditions survey are at 0930 BST. In the US, PPI is at 1330 BST, while University of Michigan consumer sentiment and business inventories are at 1500 BST.

In corporate news, Irish investment holding company DCC’s technology division is to buy Hammer Consolidated Holdings, a server and storage solutions reseller, for about £38m.

The acquisition by DCC Technology, which trades under Exertis, is expected to be completed by the end of the year and agreed to buy the issued share capital of Hammer based on an initial market value of £38.3m.

Specialist emerging markets asset manager Ashmore Group updated the markets on its assets under management on Friday, for the quarter to 30 September. The FTSE 250 firm said assets under management increased by $2bn during the period, driven solely by positive investment performance, with net flows flat for the three months.

It said the neutral net flow for the quarter resulted from small net inflows into the blended debt, local currency, corporate debt and overlay/liquidity themes, offset by equally small net outflows from equities, external debt, and multi-asset. “The continued improvement in net flows is encouraging in what is typically a quiet quarter,” said CEO Mark Coombs.

Provident Financial's performance during the third quarter was in line with management's own expectations, the company said in a statement. Credit quality at all three of its main units was described as "very sound", with the lender confident of its ability to deliver "good" full-year results.

Group funding and liquidity position remained strong and sufficient to fund maturities and projected growth in the business until May 2018.