London midday: Stocks rise as oil prices rally, UK trade deficit narrows

Oil prices edged higher as wildfires caused supply outages in Canada, helping to ease the global glut of crude. The wildfires in Canada’s oil-rich Alberta province have reduced production by 1.6m barrels a day, according to consultancy Energy Aspects.

At 1138 BST Brent crude increased 1.5% to $44.33 per barrel and West Texas Intermediate grew 0.93% to $43.85 per barrel.

The UK trade deficit on goods and services narrowed to £3.8bn in March from £4.3bn the previous month, beating analysts’ estimates of £4.2bn, the Office for National Statistics said.

The narrowing of the deficit was supported by a £0.4bn increase in exports to £23.7bn, which mainly included unspecified goods, machinery and transport equipment.

However, in the first quarter the total trade deficit for goods and services widened by £1.1bn to £13.3bn compared to the fourth quarter.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "Looking ahead, the slowdown in domestic demand should bear down on imports, helping the trade deficit to narrow further.

"But the outlook for exports remains lacklustre; the real-effective exchange rate is about 5% above its 35-year average despite its recent depreciation, and sterling will rebound if the UK votes to remain in the EU, as we expect."

Meanwhile, the British Retail Consortium said British shoppers held back from buying new spring and summer clothes during an unusually cold April. Like-for-like retail sales fell 0.9% year-on-year in April, compared to a 0.7% fall in March and analysts’ expectations for a 0.5% increase.

Elsewhere, China’s consumer price index rose 2.3% year-on-year in April, unchanged from the previous month and in line with analysts’ estimates. Food prices, particularly pork, were the biggest drivers of inflation.

The producer price index fell 3.4% last month compared to a year ago, easing from March’s 4.3% decline and beating forecasts for a 3.7% drop.

“While this will continue to apply deflationary pressure, it is an improvement from March’s 4.3% decline and suggests the negative price pressures from the drop in commodities is beginning to abate,” said Craig Erlam, senior market analyst at Oanda.

In the US, small business confidence rebounded from a two-year low in April as optimism on the labour market grew, according to the National Federation of Independent Business. The small business optimism index rose 1.0 point to a reading of 93.6 last month, compared to forecasts for 93.1.

In company news, EasyJet flew higher after reporting a smaller first half loss than expected.

Capita surged after saying it had a 'solid' start to the year and was confident of growing organic sales 4% in 2016.

TUI continued to gain after Deutsche Bank expressed confidence that the company would enjoy a strong summer.

Going the other way, housebuilders Taylor Wimpy, Berkeley Group and Barratt Developments declined amid fears about Brexit and a slowdown in London’s prime real estate market. Fuelling worries over Brexit, the British Chambers of Commerce said a poll conducted in April showed 37% of members intend to vote to leave the EU in the 23 June referendum, compared to 30% in poll conducted between 23 January and 4 February.

Mining stocks were in the red, including Antofagasta, Glencore and Randgold Resources, as commodities remained under pressure within iron ore shedding 5.6%.

Market Movers

FTSE 100 (UKX) 6,159.77 0.74%
FTSE 250 (MCX) 16,767.03 0.48%
techMARK (TASX) 3,076.36 0.39%

FTSE 100 - Risers

Capita (CPI) 1,083.00p 5.76%
Barclays (BARC) 163.15p 2.97%
Standard Chartered (STAN) 490.60p 2.78%
Anglo American (AAL) 573.00p 2.41%
Babcock International Group (BAB) 963.00p 2.39%
easyJet (EZJ) 1,499.00p 1.97%
TUI AG Reg Shs (DI) (TUI) 1,057.00p 1.93%
Royal Bank of Scotland Group (RBS) 216.70p 1.78%
International Consolidated Airlines Group SA (CDI) (IAG) 522.50p 1.75%
GKN (GKN) 278.50p 1.72%

FTSE 100 - Fallers

Antofagasta (ANTO) 410.60p -1.44%
Associated British Foods (ABF) 3,134.00p -1.07%
Travis Perkins (TPK) 1,833.00p -1.03%
Taylor Wimpey (TW.) 182.30p -0.92%
Glencore (GLEN) 131.50p -0.79%
Berkeley Group Holdings (The) (BKG) 2,966.00p -0.60%
Randgold Resources Ltd. (RRS) 5,905.00p -0.59%
Smith & Nephew (SN.) 1,159.00p -0.52%
ITV (ITV) 219.70p -0.41%
Intu Properties (INTU) 298.00p -0.33%

FTSE 250 - Risers

Lookers (LOOK) 137.20p 4.89%
Virgin Money Holdings (UK) (VM.) 333.80p 2.99%
Morgan Advanced Materials (MGAM) 242.70p 2.75%
Restaurant Group (RTN) 281.00p 2.63%
Drax Group (DRX) 316.60p 2.49%
Petrofac Ltd. (PFC) 819.50p 2.44%
IMI (IMI) 992.00p 2.32%
CLS Holdings (CLI) 1,624.00p 2.20%
Thomas Cook Group (TCG) 91.45p 2.18%
Clarkson (CKN) 2,308.00p 2.17%

FTSE 250 - Fallers

Evraz (EVR) 111.40p -4.46%
Shawbrook Group (SHAW) 270.40p -2.06%
Centamin (DI) (CEY) 107.40p -2.01%
John Laing Infrastructure Fund Ltd (JLIF) 123.00p -1.52%
Brown (N.) Group (BWNG) 249.00p -1.39%
Kaz Minerals (KAZ) 148.70p -1.06%
Redefine International (RDI) 46.37p -1.05%
Sophos Group (SOPH) 211.30p -0.98%
McCarthy & Stone (MCS) 221.00p -0.85%
Stagecoach Group (SGC) 256.00p -0.81%