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FTSE 100 shrugs off global economic turmoil to rally

Published: 10:35 10 Feb 2016 GMT

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London shares bounced back from Tuesday's losses despite enduring economic worries and dismal UK industrial production data.

The FTSE 100 Index ticked up 62.77 points to 5694 in early trading, shrugging off fears about the potential impact of global economic volatility on banks that dragged it down in the previous session.

Markets also appeared to brush off bad news about UK industrial production, which dropped 1.1% month-to-month in December, well short of the consensus of -0.1%.

The decline in production in December left it 0.5% lower quarter-on-quarter in the fourth quarter, exceeding the 0.2% drop that underpinned the preliminary GDP estimate.

Samuel Tombs at Pantheon Macroeconomics said: "The chances that the headline GDP growth number will be revised down therefore have grown."

In the markets, shares in Tangent Communications (LON:TNG) soared 0.88p, or 63.6%, to 2.25p after some members of the digital marketing firm's management made a £6.7mln bid for the company.

Shares in film studio group Pinewood (LON:PNS) also shot up 66p, or nearly 15%, to 515.5p after it said it could sell itself as part of a review of strategic options to boost growth.

But Hornby (LON:HRN) lost steam by 38p to 43p - nearly half its value - after the model railway maker warned that losses would hit £6mln following weak New Year sales.

Magnolia Petroleum (LON:MAGP) spurted 0.02p, or 10.8%, to 0.2p after the US onshore oil & gas group added eight new wells to its portfolio in its latest quarter, taking the total in production where it has a stake to 210.

Investors powered up stakes in 88 Energy (LON:88E) as it told them that, with better-than-expected permeability test results, it has now crossed off two of three potential ‘Achilles heels’ of its new shale play in Alaska. Shares rose 58.8% to 0.54p.

MARKET PREVIEW

London was set for a nervy start after another bad night for Asian stock markets.

Financial spread bet firms see FTSE 100 opening flat at around the 5,632 mark, where it closed Tuesday, but the mood can change quickly.

This week so far London’s blue chips have shed around £50bn in value, with bank shares taking the brunt of the selling on worries of a new liquidity crunch.

Japanese markets, though, have fared much worse.

The Nikkei is now back to its levels of 2014 after days of heavy selling.

Tokyo lost 5.4% of its value on Tuesday and was heading for another heavy loss today.

Towards the end of trading, the index was off by some 2.3%.

US shares performed a little better though small gains in the afternoon session had given way to another decline by the close of trading.

The Dow Jones Industrial Average was 13 points lower to 16,014 with weak oil prices again a feature. Crude was down to around the US$28 per barrel. Nasdaq and the S&P 500 were also in the red.

Janet Yellen, the US Federal Reserve chair makes two speeches over the next two days.

UK company news sees Tullow Oil (LON:TLW), which operates in Africa and elsewhere, report and write-downs are likely to feature heavily.

Apple supplier ARM (LON:ARM) will also give a measure of how the smart phone market is holding up to the global uncertaintty currently.

Bellway, Electrocomponents, Great Portland, brewer Greene King and Victrex also are due to issue updates.

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