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London midday: Stocks push higher after mixed China data; US earnings in focus

By Michele Maatouk

Date: Friday 12 Apr 2019

London midday: Stocks push higher after mixed China data; US earnings in focus

(Sharecast News) - London stocks had extended gains by midday on Friday as investors mulled mixed Chinese data and eyed the start of the first-quarter US earnings season.
The FTSE 100 was 0.4% firmer at 7,445.06, while the pound was up 0.2% against the dollar at 1.3082 and 0.3% weaker versus the euro at 1.1565.

CMC Markets analyst Michael Hewson noted that expectations going into US earnings season are low, with bellwethers JPMorgan and Wells Fargo slated to kick off the proceedings.

"Banks across the board have been finding it difficult to maximise returns in the current low rate environment," he said.

"Trading in the first three months of this year has proved to be even more difficult, with inversion of the US yield curve prompting JP Morgan to review its staffing levels in news out last month. With the bank missing profit estimates in its last quarter for the first time in 15 quarters, and the recent announcement of job cuts in its asset and wealth management divisions, today could well see another disappointment.

"Wells Fargo, on the other hand offers an insight into the US housing market, and here we've seen a significant amount of weakness in recent months. This could well be another disappointing quarter."

Market participants were also digesting some mixed data out of China.

Exports surged past expectations in March, rising 14.2% in US dollar terms from the previous year amid the ongoing trade dispute with the US, following a 20.8% drop in February. However, imports declined 7.6% compared to a 5.2% fall the month before. Analysts had been expecting exports to rise 6.5% and imports to edge up 0.2%.

Meanwhile, new loans and lending jumped higher in March, with M2 money supply up 8.6% on the year versus expectations for an 8.2% increase, and new loans coming in at 1.69 trillion yuan compared to expectations of 1.25 trillion.

David Cheetham, chief market analyst at XTB, said: "Compared to levels seen in recent years these figures aren't actually that elevated, but they do represent a pick-up compared to the latest numbers and suggest the world's second largest economy is scaling back on its deleveraging efforts in a bid to bolster growth.

"In itself this data could be described as only mildly supportive of risk assets but the clear positive market reaction reveals how both equities and crude oil retain a heightened sensitivity to good news at present, while looking through any negatives - a pleasing scenario for bulls."

In equity markets, miners pushed higher, with Glencore, Antofagasta and Rio Tinto all up as copper prices advanced.

Gaming retailer Games Workshop rallied after saying that trading since January has "continued well" with sales and profits ahead of last year.

Transport company National Express was in the green as it announced the acquisition of a 60% stake in WeDriveU, an employee shuttle company in San Francisco's Silicon Valley, for $84.3m (£64.5m) with an option to buy the rest over three years.

On the downside, online trading platform Plus500 saw its shares tumble as it posted a 65% drop in first-quarter revenue amid "subdued" financial markets, with the number of active customers and average revenue per user both down amid low levels of volatility. Sector peers IG Group, Playtech and CMC Markets all lost ground.

Shares in Pets at Home slumped as it emerged that Canada Pension Plan Investment Board (CPPIB) has sold its entire 10.8% stake in the pet supplies retailer.

Entertainment One fell as the Peppa Pig owner said it had successfully placed 28.9m shares at 450p, raising £130m to help fund the acquisition of UK score producer Audio Network.

Tobacco stocks retreated, with British American Tobacco and Imperial Brands both weaker as traders pointed to a Wall Street Journal report that US pharmaceutical chain Rite-Aid will stop stocking e-cigarettes due to fears over their appeal to children and teens.

Market Movers

FTSE 100 (UKX) 7,445.06 0.37%
FTSE 250 (MCX) 19,693.51 0.37%
techMARK (TASX) 3,545.52 0.29%

FTSE 100 - Risers

Smurfit Kappa Group (SKG) 2,318.00p 2.93%
Smith (DS) (SMDS) 354.00p 2.82%
Standard Chartered (STAN) 666.00p 2.56%
Glencore (GLEN) 330.15p 2.31%
Antofagasta (ANTO) 1,021.00p 2.00%
Just Eat (JE.) 734.40p 1.86%
easyJet (EZJ) 1,162.50p 1.57%
Mondi (MNDI) 1,797.33p 1.54%
TUI AG Reg Shs (DI) (TUI) 787.20p 1.52%
Melrose Industries (MRO) 193.05p 1.50%

FTSE 100 - Fallers

Barratt Developments (BDEV) 608.60p -1.30%
Hikma Pharmaceuticals (HIK) 1,761.50p -1.26%
British American Tobacco (BATS) 3,049.50p -1.17%
Taylor Wimpey (TW.) 185.88p -1.13%
Centrica (CNA) 109.15p -0.91%
Fresnillo (FRES) 791.40p -0.88%
Unilever (ULVR) 4,357.00p -0.82%
Smith & Nephew (SN.) 1,483.79p -0.82%
SEGRO (SGRO) 678.00p -0.79%
AstraZeneca (AZN) 5,971.00p -0.78%

FTSE 250 - Risers

Games Workshop Group (GAW) 3,664.00p 10.69%
Rank Group (RNK) 164.20p 7.04%
OneSavings Bank (OSB) 434.60p 4.98%
Indivior (INDV) 32.80p 4.96%
William Hill (WMH) 167.90p 4.09%
CYBG (CYBG) 215.40p 3.91%
Tullow Oil (TLW) 245.90p 3.80%
Kier Group (KIE) 350.00p 3.43%
Kaz Minerals (KAZ) 741.40p 3.06%
Amigo Holdings (AMGO) 254.00p 2.83%

FTSE 250 - Fallers

Plus500 Ltd (DI) (PLUS) 528.60p -26.52%
Pets at Home Group (PETS) 140.50p -13.91%
Entertainment One Limited (ETO) 460.60p -3.40%
Stagecoach Group (SGC) 121.12p -2.33%
WH Smith (SMWH) 2,140.00p -2.10%
IG Group Holdings (IGG) 507.00p -1.93%
Spirent Communications (SPT) 143.80p -1.78%
Royal Mail (RMG) 260.80p -1.70%
Centamin (DI) (CEY) 86.93p -1.55%
Bakkavor Group (BAKK) 130.20p -1.36%


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