- UK industrial production up one per cent in May
- UK still in recession, says NIESR
- Chinese import data disappoints
Some better-than-expected production data from the UK helped lift stocks on Tuesday, while falling borrowing costs in the Eurozone periphery also helped to lighten the mood.
UK industrial production rose unexpectedly in May, helped by a bank holiday slipping back into June. Production rose by 1% between April 2012 and May 2012, with manufacturing rising by 1.2%. Analysts had pencilled in no rise.
Not all economic news was cheery though. According to the National Institute of Economic and Social Research (NIESR), gross domestic product (GDP) in the UK fell by 0.2% in the second quarter, dragged lower by the extra bank holiday for the Queen’s Diamond Jubilee. GDP fell by 0.4% and 0.3% in the fourth quarter of 2011 and the first quarter of 2012, respectively.
Falling bonds yields in Spain helped sentiment today after Eurozone finance ministers agreed to give the nation EUR30bn of the EUR100bn it needs to recapitalise its banks as early as the end of the month. The Eurogroup also announced that they would allow Spain extra time to reach its deficit targets. By the close in London, the yield on a 10-year Spanish bond was 25.1 basis points lower at 6.811%.
In other news, Chinese import growth slowed from 12.7% to 6.3% in June, below expectations of an 11.3% increase. Meanwhile, export growth slowed from 15.3% to 11.3%, above the 9% rise expected. Lower-than-expected imports pushed China’s trade surplus to a three-year high.
FTSE 100: GKN and Prudential make decent gains
Engineering group GKN was a high riser, with Barclays Capital reiterating its ‘overweight’ position on the stock with a 258p target price, some 24% ahead of last night’s close of 208.7p. Helping bolster the share price today could be the Farnborough Airshow which kicked off yesterday.
Insurance group Prudential advanced on the back of rumours that it is interested in acquiring Aviva’s Malaysian insurance unit for half a billion pounds.
Both ARM Holdings and Compass Group were lower due to poor read-across from international peers; the chip designer was the worst performer today after US counterpart Advanced Micro Devices slashed its second-quarter outlook; while the catering firm was taken down after French group Sodexo saw growth slow in the third quarter. ?
First-quarter like-for-like sales took a tumble at High Street giant Marks and Spencer, though the food business held up well, and full-year guidance remains unchanged, pressuring shares higher.
Oil stocks were also on the rise on the back of some positive newsflow from Norway: the Norwegian government prevented a strike and industry lockout planned for today. the country accounts for 11% of Europe’s oil and 25% of its natural gas. BP and Shell were in demand in London.
FTSE 250: Afren jumps on M&A speculation
Oil and gas group Afren surged today on the back of rumours that both ENI and Exxon Mobil could be interesting in bidding for the firm. Market chatter is pencilling an offer price of around £2.15bn for Afren, over 200p a share. The stock closed yesterday at 104.8p.
Support services and construction group Interserve was another high riser after reporting this morning that it has won work worth over £1bn in the first half of 2012.
Iron ore producer Ferrexpo was in demand after seeing pellet production rise 2.1% to 2.31m tonnes in the second quarter from 2.26m tonnes in the preceding quarter.
Heading the other way building products distributor SIG after saying that it was buffeted by bad weather and a weak euro in the first half, with more challenges ahead in the second.
Online gaming firm bwin.party said it has been hit by weak poker revenues and the lack of shock results at the Euro 2012 football championship, prompting a dip in the share price today.
FTSE 100 – Risers
Prudential (PRU) 753.50p +3.29%
GKN (GKN) 215.50p +3.26%
Amec (AMEC) 1,052.00p +3.14%
BAE Systems (BA.) 305.00p +2.73%
Aggreko (AGK) 2,082.00p +2.41%
Burberry Group (BRBY) 1,284.00p +2.31%
Barclays (BARC) 167.00p +2.20%
Legal & General Group (LGEN) 128.70p +2.14%
Marks & Spencer Group (MKS) 327.80p +2.12%
Vedanta Resources (VED) 916.50p +2.12%
FTSE 100 – Fallers
ARM Holdings (ARM) 480.50p -3.11%
GlaxoSmithKline (GSK) 1,454.00p -2.81%
Compass Group (CPG) 656.00p -2.02%
Johnson Matthey (JMAT) 2,167.00p -1.23%
Antofagasta (ANTO) 1,084.00p -1.00%
Polymetal International (POLY) 877.00p -0.68%
BG Group (BG.) 1,300.00p -0.57%
Hammerson (HMSO) 448.00p -0.24%
Schroders (SDR) 1,312.00p -0.23%
AstraZeneca (AZN) 2,915.00p -0.15%
FTSE 250 – Risers
Afren (AFR) 114.30p +9.06%
Interserve (IRV) 337.50p +6.37%
Renishaw (RSW) 1,388.00p +5.55%
Ferrexpo (FXPO) 210.50p +5.46%
Chemring Group (CHG) 290.40p +4.54%
Ocado Group (OCDO) 71.90p +4.51%
International Personal Finance (IPF) 250.70p +4.11%
Hunting (HTG) 743.00p +3.99%
Shanks Group (SKS) 79.90p +3.90%
Phoenix Group Holdings (DI) (PHNX) 490.00p +3.81%
FTSE 250 – Fallers
Avocet Mining (AVM) 66.55p -8.52%
SIG (SHI) 91.50p -4.74%
Home Retail Group (HOME) 81.55p -3.61%
FirstGroup (FGP) 204.40p -3.36%
Aquarius Platinum Ltd. (AQP) 40.20p -3.34%
Essar Energy (ESSR) 114.70p -2.96%
Balfour Beatty (BBY) 302.00p -2.89%
Filtrona PLC (FLTR) 461.00p -2.74%
Bwin.party Digital Entertainment (BPTY) 105.00p -2.60%
Ruspetro (RPO) 128.10p -2.21%