FTSE 100 movers: China confidence boosts miners

Miners led the way as confidence was restored somewhat in China, the world’s largest commodities importer after data showed China’s trade surplus rose more than expected.

It widened to 382.05bn yuan in December from 343.10bn yuan in November, beating analysts’ forecasts of 338.80bn yuan. Exports rose unexpectedly by 2.3% in December following a 3.7% dip a month earlier. Economists had pencilled in a 4.1% drop. Imports declined 4% last month, compared to analysts’ estimates for a 7.9% fall and November’s 5.6% slide. It pushed Anglo American, Rio Tinto and Glencore to the top of the class.

“China’s trade data for December support our view that, despite the turmoil in Chinese financial markets, there has not been a major deterioration in its economy in recent months,” according to Capital Economics. “Meanwhile, another large trade surplus last month provides a cushion for the People’s Bank in the face of soaring capital outflows.”

Oil was on the rise again after dipping below $30 a barrel earlier this week, which has seen BP feature on the risers list. At 1511 GMT, West Texas Intermediate crude was up 4.07% to $31.68 a barrel, while Brent crude was up 3.05% to $31.80.

Investors were also happy with Sports Direct International’s two 'strategic' investments in the US as it looks to reduce reliance on its domestic market.

The sports discounter, which last week warned on profits amid widespread criticism about the treatment of its staff, has snapped up an 11.5% stake in Umbro and Lee Cooper-owner Iconix Brand Group and 2.3% of US retailing giant Dick's Sporting Goods. It said its main rationale for taking these stakes was to allow it to "hopefully build a relationship and develop commercial partnerships" with the US companies. "They also help the company to build relationships with key suppliers and brands," it added.

Lloyds Banking Group was the biggest faller after Exane BNP Paribas downgraded the stock from ‘neutral’ to ‘underperform’ on a bleak operational outlook for UK banks.

“We cut 2017 EPS estimates by an average of 4% to reflect slightly lower margin and slightly higher impairment assumptions - driven by a more rapid reduction in releases and recoveries.” It said Britain’s potential exit from the EU could also push up the sector’s risk premium ahead of the referendum.

Exane BNP Paribas’ concerns about Lloyds Banking Group’s margin and impairment have increased since it last downgraded the stock in September 2015. “We also think the cost income target of 45% by 2018, set just one year ago, is now unachievable,” the note said. “Distribution potential is also debatable, and we think the bank will be able to pay just 12p of dividends (or the equivalent in buybacks) over the next three years, well below some market estimates.”

Sainsbury also dipped after it revealed like-for-like retail sales were down 0.4% over the festive third quarter but by less than the 0.7% forecast. That led the grocer to say that the second half as a whole is likely to be better than the first.

The supermarket, which is continuing to mull a bid for Home Retail after a November offer was rejected, lifted total retail sales 0.8% excluding fuel, as its new simpler pricing strategy of lower regular prices and reduced levels of vouchering and promotional participation helped grow transactions and volumes.

Chief executive Mike Coupe later said on a conference call that the company will "only pay what we can afford to pay" for Home Retail was rebuffed, adding that he will look for other opportunities if no deal is reached with the Argos and Homebase owner.

FTSE 100 - Risers

Anglo American (AAL) 242.65p 4.37%
Rio Tinto (RIO) 1,723.50p 4.33%
Glencore (GLEN) 75.05p 4.24%
BP (BP.) 336.70p 4.21%
Shire Plc (SHP) 4,278.00p 3.99%
Babcock International Group (BAB) 992.00p 3.93%
Sports Direct International (SPD) 428.10p 3.91%
Tesco (TSCO) 161.20p 3.87%
Capita (CPI) 1,205.00p 3.34%
Centrica (CNA) 212.10p 2.66%

FTSE 100 - Fallers

Lloyds Banking Group (LLOY) 68.11p -1.72%
Merlin Entertainments (MERL) 435.40p -1.43%
London Stock Exchange Group (LSE) 2,550.00p -1.32%
Sky (SKY) 1,090.00p -1.18%
Sainsbury (J) (SBRY) 249.20p -0.80%
easyJet (EZJ) 1,711.00p -0.52%
TUI AG Reg Shs (DI) (TUI) 1,263.00p -0.47%
Next (NXT) 6,740.00p -0.44%
Bunzl (BNZL) 1,840.00p -0.43%
Sage Group (SGE) 587.00p -0.42%