The London market rose on Monday as traders gave a cautious welcome to mixed economic figures out of China.
The FTSE 100 Index lifted 24.9 points to 6402 in the first hour of trading after Beijing revealed its economy expanded by a slightly better-than-expected 6.9% in the third quarter.
The expansion was said to be the slowest since 2009 and was tempered by below-par industrial production and fixed asset investment readings.
Chief investment officer at Close Brothers Asset Management, Nancy Curtin, said: “This reading may be enough to ward off any calls for more aggressive stimulus.
"Imports have fallen, export numbers have been unimpressive and the shift to the consumer and service-orientated model is far from an easy ride, but we’re not looking at near economic collapse."
Other analysts believe interest rate reductions are still on Beijing's agenda. Chris Scicluna at Daiwa Capital Markets said: "They would not lead us to change our expectation that further cuts to interest rates and banks’ reserve ratio requirements are likely to be in store."
On the corporate front, drug group Shire (LON:SHP) reversed 63p to 4448p on news that US regulators want another clinical study of its dry eye drug lifitegrast.
ITV (LON:ITV) fell 0.6p to 248.1p on news that it was buying Northern Ireland channel three licence holder UTV (LON:UTV) for £100mln.
African Potash (LON:AFPO) was 0.25p off at 1.95p on news that Ernst & Young veteran Elias Pungong was replacing Ed Marlow as a non-executive director.
Michelmersh Brick (LON:MBH) subsided 7.5p to 94p as it predicted higher-than-expected annual profits, but said a softer market had hit delivery volumes.
Kefi Minerals (LON:KEFI) backtracked 0.02p to 0.45p after it said it was now focused on finalising full development funding for its Tulu Kapi gold mine in Ethiopia ahead of targeted gold production in 2017.
MARKET PREVIEW
The FTSE 100 is expected to make a muted start to the week with mixed signals coming from Asia.
Overnight China revealed its economy expanded by a slightly better than expected 6.9% in the third quarter.
However this was tempered by below par industrial production and fixed asset investment readings.
“It’s hard to be overly optimistic about the headline number, especially given the range of other data released today,” said Angus Nicholson, market commentator at the spread betting firm IG.
The result was a rather mixed session for Asia’s main stocks with the Shanghai Composite up 0.5%, the Nikkei 225 and Hang Seng in Hong Kong off 0.24% and 0.26% respectively and the Australia’s ASX index flat.
In London the FTSE 100 is set to open a slightly rudderless 7 points lower at 6,371.4.
The week looks set to be a busier one for corporate news with Sky and Whitbread reporting on Wednesday, followed by figures from Debenhams, Ladbrokes and the London Stock Exchange the day after.
In the US, expect a welter of third quarter results. On both sides of the Atlantic eyes will be on the impact on corporate profitability of the world's second-largest economy.
“A recurring theme coming out of last week’s company earnings reports was a weakening of demand in Chinese markets,” said Michael Hewson, analyst at CMC Markets.
“[This was] a factor cited by Burberry, Hugo Boss, Nestle, Yum Brands and Wynn Resorts amongst others, and with global economic bellwether Caterpillar due to report later this week, after warning on its outlook and revenues in September, expectations are for further disappointment this week.
“Attention this week will once again be on the Chinese economy despite assurances from Chinese officials that what we are seeing is the natural growing pains of an economy merely adjusting to the normal ebb and flow of a shift from an industrial base to a more services based economy.”
Other market data…
Crude Oil 0.24% lower at $50.34 per barrel.
Gold 1.04% or $12.30 lower at $1171.30 per ounce.
Currency the Euro is trading 0.07% higher against the US Dollar at $1.1356.
The pound is trading marginally higher against the US Dollar at $1.5440.