London midday: Stocks boosted by Chinese lending figures ahead of US inflation

China’s banks issued 1.05trn yuan in new yuan loans in September, compared to 809.6bn yuan in August and analysts’ expectations of 850bn yuan.

“Although this will add to concerns about the trajectory of Chinese debt levels, in the short-run it will nonetheless be supportive of economic activity,” according to Capital Economics.

The report comes as a slight relief following Wednesday’s disappointing Chinese inflation figures which showed a slowdown to 1.6% growth in September from a year earlier, down from a 2% increase in August.

Looking ahead, US inflation figures at 1330 BST will be in focus with analysts expecting deflation in September amid falling energy and food prices.

The CPI is forecast to drop 0.1% in September from a year ago, following a 0.2% increase in August. Analysts predict CPI on a month-on-month basis to decrease 0.2% last month after a 0.1% fall in August. Excluding food and energy prices, CPI growth last month is estimated to remain in line with August, rising 0.1% month-on-month and 1.8% year-on-year.

The Federal Reserve’s September policy meeting minutes last week revealed the central bank voted to keep interest rates unchanged in part due to concerns of prolonged low inflation. The Fed is targeting 2% inflation.

“Given that there is usually a lag on the CPI numbers we can probably expect a similarly weak outlook as we head towards year end, making it doubly difficult for the US Fed to continue pushing its narrative of a rate rise sometime this year,” said Michael Hewson, chief market analyst at CMC Markets.

The US will also see the release of the Empire manufacturing index at 1330 BST and initial jobless claims due at the same time.

Fed officials James Bullard and William Dudley will speak at separate events at 1530 BST, potentially offering more clues on interest rates.

In company news, Burberry plunged after reporting broadly flat sales in the six months to 30 September after a slowing in the second quarter due to its exposure to China. The luxury fashion retailer said it would cut costs to minimise the impact on full-year profits.

Unilever advanced after posting a jump in revenue in the third quarter and saying it expects underlying sales growth for the year to be towards the top end of its target range.

Ashmore slid after reporting a 13% drop in assets under management in the first quarter, dented by net outflows and negative investment performance.

Hargreaves Lansdown continued its rally after reporting a near-50% increase in net new business in the third quarter on Wednesday.

WH Smith gained after the retailer posted a rise in pre-tax profit for the year on the back of a good performance across the group, with the travel business in particular providing a boost.

Man Group rallied as it revealed a 2.5% increase in funds under management in the third quarter despite volatile markets.

Market Movers

techMARK 3,009.85 +0.73%

FTSE 100 6,323.86 +0.87%

FTSE 250 16,886.00 +0.44%

FTSE 100 - Risers

ARM Holdings (ARM) 985.50p +5.63%

Unilever (ULVR) 2,906.00p +4.16%

Glencore (GLEN) 124.50p +3.75%

London Stock Exchange Group (LSE) 2,455.00p +3.37%

Mondi (MNDI) 1,463.00p +2.88%

Aberdeen Asset Management (ADN) 340.20p +2.44%

Hargreaves Lansdown (HL.) 1,360.00p +2.26%

Standard Chartered (STAN) 742.50p +1.99%

St James's Place (STJ) 855.00p +1.91%

Barratt Developments (BDEV) 621.50p +1.89%

FTSE 100 - Fallers

Burberry Group (BRBY) 1,245.00p -12.26%

Sports Direct International (SPD) 654.50p -3.04%

Smiths Group (SMIN) 1,019.00p -1.07%

Meggitt (MGGT) 466.00p -0.83%

Ashtead Group (AHT) 972.50p -0.66%

GKN (GKN) 282.00p -0.46%

Royal Dutch Shell 'A' (RDSA) 1,766.00p -0.14%

United Utilities Group (UU.) 966.50p -0.10%

Hikma Pharmaceuticals (HIK) 2,069.00p -0.10%

FTSE 250 - Risers

WH Smith (SMWH) 1,661.00p +7.79%

Man Group (EMG) 156.20p +3.31%

Acacia Mining (ACA) 223.10p +2.86%

Drax Group (DRX) 288.40p +2.71%

Kaz Minerals (KAZ) 133.10p +2.62%

Ocado Group (OCDO) 340.50p +2.53%

CLS Holdings (CLI) 1,784.00p +2.53%

Regus (RGU) 317.70p +2.42%

Centamin (DI) (CEY) 69.10p +2.14%

Investec (INVP) 540.00p +2.08%

FTSE 250 - Fallers

Ted Baker (TED) 2,754.00p -4.64%

Card Factory (CARD) 356.20p -4.07%

Spectris (SXS) 1,699.00p -2.97%

Serco Group (SRP) 102.20p -2.57%

Booker Group (BOK) 176.10p -2.17%

Electrocomponents (ECM) 216.30p -1.95%

Dunelm Group (DNLM) 925.00p -1.86%

Petra Diamonds Ltd.(DI) (PDL) 96.35p -1.73%

Domino's Pizza Group (DOM) 985.00p -1.70%

Pace (PIC) 363.90p -1.65%

FTSE TechMARK - Risers

Dialight (DIA) 670.00p +3.08%

SDL (SDL) 393.50p +2.47%

NCC Group (NCC) 267.50p +1.61%

Spirent Communications (SPT) 76.50p +1.32%

Triad Group (TRD) 32.00p +0.79%

Oxford Instruments (OXIG) 676.50p +0.67%

KCOM Group (KCOM) 89.75p +0.28%

E2V Technologies (E2V) 238.50p +0.21%

FTSE TechMARK - Fallers

XP Power Ltd. (DI) (XPP) 1,476.00p -2.06%

Consort Medical (CSRT) 925.50p -1.07%

Skyepharma (SKP) 330.00p -0.75%

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