The FTSE 100 finished strongly on Friday afternoon as better-than-expected economic data from across the globe offset yesterday's gloomy comments from Mario Draghi which sparked a sell-off.
Markets across Europe suffered steep falls on Thursday - London's FTSE 100 dropped 1.06% - after European Central Bank (ECB) President Mario Draghi said that the recent rise in the euro could post a threat to the inflation outlook and hamper the recovery across the continent. He also claimed that the recovery across the region would not start until later in the year.
Economic data lifts the mood
However, trade data from both powerhouses China and the US helped lift stocks across Europe today. China's trade surplus fell by less than expected in January, from $31.6bn to $29.2bn, above the $26.6bn forecast. This was helped by a 28.8% surge in imports and a 25% jump in exports.
The US trade deficit shrank by 20.7% month-on-month in December from $48.6bn to $38.5bn, reflecting a surge in the oil balance as exports of 'black gold' rise and imports fall, which could lead to a large upwards revision to the preliminary estimate for fourth-quarter gross domestic product (GDP). The consensus estimate was for a fall to just $46.0bn.
Meanwhile, UK construction output grew by 0.9% quarter-on-quarter in the last three months of 2012, according to the latest data from the Office for National Statistics (ONS), well above the 0.3% preliminary estimate included in the latest GDP figures.
FTSE 100: GKN gains on strong Chinese auto data
Engineering and auto group GKN was in demand today after it was reported that Chinese passenger-vehicles sales jumped by 49% year-on-year to a record 1.73m units last month, better than expected, driven by strong demand for SUVs in the all-important pre-Lunar New Year shopping period. Just under a quarter of GKN's Driveline vehicles were produced in China in the first half of the year.
Temporary power and temperature controls firm Aggreko was higher after HSBC upgraded the stock to 'neutral'. There was also some 'market chatter' speculating that Aggreko could be a bid target for ABB.
Engineering group Weir was also on the up after UBS raised its target price from 2,000p to 2,300p and reiterated its 'buy' rating on the stock. The broker cited positive read-across from recent results from sector peers Metso and Outotec.
Pushing airline IAG higher was the mounting speculation that a merger agreement could be fast approaching for bankrupt US carrier, American Airlines and US Airways.
Anglo American rose after HSBC upped its target price from 1,950p to 2,240p and upgraded it to 'overweight'.
Imperial Tobacco was a heavy faller after Investec downgraded the stock from 'buy' to 'hold', saying: "There is support from the valuation and the prospect of a takeout. But we don't think the latter is imminent enough and while IMT looks 'cheap', it doesn't look that cheap in the current Darwinian climate."
Water provider Severn Trent was also lower after announcing that it has sold its Analytical Services division to Australian testing inspection and certification (TIC) group ALS for an undisclosed sum.
FTSE 250: bwin.party gains on New Jersey hopes
Online gaming firm bwin.party jumped on speculation that it could receive a licence to operate in New Jersey. "Now is the time for the state to move forward, leading the way for the nation, by becoming one of the first states to permit internet gaming," New Jersey's Governor Chris Christie was quoted as saying. Sector peers Playtech and Betfair were also higher.
Office provider Workspace was wanted after saying that demand for space remains strong with an increase in like-for-like rent roll in the quarter and the year to date as it continues with its programme of refurbishment and redevelopment.
Insurer Catlin was firmly lower despite raising its dividend after reporting that annual profit before tax surged from $71m to $339m.
FTSE 100 - Risers
GKN (GKN) 255.50p +3.90%
International Consolidated Airlines Group SA (CDI) (IAG) 218.50p +3.46%
Old Mutual (OML) 192.00p +3.28%
Standard Chartered (STAN) 1,694.00p +2.67%
HSBC Holdings (HSBA) 716.70p +2.33%
Weir Group (WEIR) 2,123.00p +2.17%
Sage Group (SGE) 330.60p +2.10%
Burberry Group (BRBY) 1,365.00p +2.09%
Barclays (BARC) 298.60p +2.09%
Aggreko (AGK) 1,588.00p +1.99%
FTSE 100 - Fallers
Imperial Tobacco Group (IMT) 2,300.00p -2.00%
Randgold Resources Ltd. (RRS) 6,000.00p -1.96%
Severn Trent (SVT) 1,589.00p -1.79%
Schroders (SDR) 1,974.00p -1.25%
Royal Dutch Shell 'B' (RDSB) 2,183.00p -0.89%
Royal Dutch Shell 'A' (RDSA) 2,127.00p -0.79%
AstraZeneca (AZN) 3,000.00p -0.71%
ARM Holdings (ARM) 919.00p -0.59%
Rexam (REX) 457.60p -0.56%
Fresnillo (FRES) 1,660.00p -0.54%
FTSE 250 - Risers
Bwin.party Digital Entertainment (BPTY) 135.80p +16.37%
Playtech Ltd. (PTEC) 532.00p +8.64%
Bumi (BUMI) 378.00p +6.51%
Tullett Prebon (TLPR) 285.10p +6.10%
Workspace Group (WKP) 333.60p +5.24%
Computacenter (CCC) 494.00p +4.95%
Dixons Retail (DXNS) 27.66p +4.77%
Dunelm Group (DNLM) 813.00p +3.70%
Beazley (BEZ) 205.20p +3.12%
Enterprise Inns (ETI) 105.10p +3.04%
FTSE 250 - Fallers
F&C Asset Management (FCAM) 104.00p -4.15%
Catlin Group Ltd. (CGL) 518.00p -3.81%
Ted Baker (TED) 1,175.00p -1.84%
Wetherspoon (J.D.) (JDW) 510.00p -1.73%
Lancashire Holdings (LRE) 831.50p -1.54%
Dialight (DIA) 1,101.00p -1.52%
Telecity Group (TCY) 864.00p -1.48%
AZ Electronic Materials SA (DI) (AZEM) 380.00p -1.40%
Smith (DS) (SMDS) 229.80p -1.37%
Afren (AFR) 150.10p -1.31%