London pre-open: Stocks set to bounce back after raft of Chinese data

Stocks are set to jump at the start of trading despite the release of a spate of weaker than expected economic data out of the world's second largest economy, China, with economists sounding a relatively optimistic note on the figures.

Acting as a backdrop, speaking on Tuesday evening, 'dovish' Bank of England chef economist Andrew Haldane appeared to find an ally in the form of the Monetary Policy Committee's newest member, Gertjan Vlieghe.

Speaking at the London School of Economics, Vlieghe said he would wait until he was certain that growth was no longer slowing and that a mix of inflation measures were pointing higher before backing an increase in interest rates.

“For a given level of growth, real interest rates may remain significantly lower than in the past [...] the fact that, at very low interest rates, policy cannot respond as effectively to bad news as it can to good news also makes me more patient before raising rates," Vlieghe said.

Against that backdrop, the Footsie was being called to start the day about 44 points higher and the German Dax by over two full percentage points, easily recouping the previous day's losses.

Overnight, China's national bureau of statistics said the country's economy expanded at a 6.8% year-on-year pace in the fourth quarter of 2015 (consensus: 6.9%).

Michael Hewson, chief market analyst at CMC Markets, said: "while these numbers are slightly disappointing they don’t point to a sharp slowdown, however it does raise the question as to what further steps to stimulate the economy policymakers will take in the coming weeks.

"Chinese data this morning was a touch weaker than expected but nothing that points to an overall hard landing. The data overall still paints a picture of stabilisation. However, there is still no sign of recovery in Q4," chimed in analysts over at Danske Bank said.

The latest consumer price data from the UK (Consensus: 0.0% month-on-month (0.2% year-on-year)) and Eurozone (Consensus: 0.0% month-on-month (0.2% year-on-year)) are scheduled for release this morning.

As of 07:38GMT, front-month Brent crude futures were 3.12% higher to $29.24 per barrel on the ICE and three-month copper futures up by 1.39% to $4,438 per metric tonne on the LME.

Unilever faces weakness in emerging markets

Pre-tax profits at Unilever fell 6% to EUR7.2bn, despite a 10% rise in turnover to €53.27bn. Underlying sales growth was up 4.1%, with volumes up 2.1% and prices rose 1.9%. Chief executive Paul Polman said the company was preparing for “tougher market conditions and high volatility in 2016, as world events in recent weeks have highlighted. Many emerging markets continued to be weak, particularly those dependent on oil and other commodity exports and those where currency devaluation is pushing up the cost of living for our consumers. Market growth in developed markets was negligible.”

Prudential has appointed John Foley as permanent chief executive of the group’s UK and Europe division. He stepped into the role as an interim measure in October last year, and was previously Group Investment Director. He also held a number of senior roles since joining the company in 2000. Group chief executive Mike Wells said Foley has played a huge role in the group's success in recent years.

Spreadbetting firm IG Group posted a drop in first half profit despite a jump in revenue, as operating costs rose. For the six months ended 30 November, net trading revenue was up 8.8% at £214.8m and new client numbers were 35% ahead of the previous year. However, pre-tax profit fell 2.8% to £98.6m. The company attributed the drop to an increase in operating costs, primarily due to its ongoing investment in growth initiatives, as well as higher betting duty and lower interest on client funds.