- Eurozone CPI surprises to the downside
- Stocks erase gains but at three-week high
- Babcock gains on nuclear contract
- Anglo, Rio lead miners higher after Credit Suisse comments
techMARK 2,764.82 +0.09%
FTSE 100 6,621.96 +0.10%
FTSE 250 16,225.36 +0.27%
UK stocks had erased gains by Monday lunchtime despite increased speculation of stimulus measures this week in the Eurozone after a sharper-than-expected fall in inflation.
Despite a strong start which pushed the FTSE 100 as high as 6,658.4 early on, the index was trading just 0.1% higher at 6,622 by midday. Still, at this level, the index was trading at its highest level since March 11th.
The annual rate of Eurozone consumer price inflation eased to a five-year low of 0.5% in March, down from 0.8% in February and below the 0.6% consensus forecast. The 'core' rate, which excludes volatile factors such as energy, food, alcohol and tobacco, fell to 0.8% from 1%, as expected.
Ben May, European Economist at Capital Economics said that the slowdown in annual price rises was probably due to the timing of Easter, which fell in March last year. "But while we expect both headline and core inflation to pick up in April, underlying inflationary pressures will remain weak thanks to the large amount of spare economic capacity and the euro's strength," he said.
May said it is "only a matter of time" before the European Central Bank (ECB) will decide that it needs to take "further policy action to prevent a worsening of the medium-term inflation outlook".
While investors are now beginning to look ahead to the ECB meeting on Thursday, there will be a barrage of economic indicators across for global financial markets to watch out for on this week.
A host of key purchasing managers' indices in China will also be in focus over the coming days as investors look to gain a better perspective of the slowdown in the world's second-largest economy. Meanwhile, there will be plenty of economic data from the US this week, including the all-important non-farm payrolls report on Friday.
In today's news, German retail sales rose by 1.3% over February, down from a revised 1.7% gain the previous month but much better than the 0.5% decline expected by analysts.
Babcock gains on nuclear contract
Engineering group Babcock was a high riser this morning its joint venture, Cavendish Fluor Partnership, was selected as the preferred bidder for a UK government contract to manage the decommissioning of nuclear sites. According to the Nuclear Decommissioning Authority the 14-year contract is worth up to £7bn.
Mining stocks were also on the rise, including Anglo American and Rio Tinto after Credit Suisse named them as its top picks in the metals and mining sector. Anglo was applauded for its restructuring potential, while the bank said that Rio's shareholder returns could be "larger and [...] sooner than any of its peer group".
Insurance stocks such as Resolution and Aviva edged higher as share prices
attempted to recover from the sell-off that ensued on Friday on the news of a regulatory investigation into the industry. The Financial Conduct Authority is set to outline its report today.
Power systems giant Rolls-Royce rose after winning a $50m one-year contract to support the US Marines Corps fleet of KC-130J air-to-air refuelling tankers.
GlaxoSmithKline declined after saying the third phase of its study of darpladib failed to meet its target for the prevention of stroke.
FTSE 100 - Risers
Babcock International Group (BAB) 1,362.00p +5.42%
Rio Tinto (RIO) 3,343.00p +1.94%
Mondi (MNDI) 1,045.00p +1.85%
Aviva (AV.) 478.40p +1.74%
Resolution Ltd. (RSL) 301.30p +1.69%
ARM Holdings (ARM) 990.00p +1.28%
Anglo American (AAL) 1,526.50p +1.16%
G4S (GFS) 240.60p +1.13%
Petrofac Ltd. (PFC) 1,430.00p +0.99%
BT Group (BT.A) 377.70p +0.96%
FTSE 100 - Fallers
Sports Direct International (SPD) 845.00p -2.42%
SSE (SSE) 1,488.00p -1.52%
Smith & Nephew (SN.) 907.50p -1.52%
St James's Place (STJ) 833.00p -1.30%
Shire Plc (SHP) 2,982.00p -1.29%
National Grid (NG.) 821.50p -1.02%
Standard Life (SL.) 377.20p -0.82%
AstraZeneca (AZN) 3,906.50p -0.79%
GlaxoSmithKline (GSK) 1,605.50p -0.77%
Glencore Xstrata (GLEN) 311.00p -0.72%
FTSE 250 - Risers
Xaar (XAR) 937.50p +5.93%
Evraz (EVR) 75.60p +4.93%
African Barrick Gold (ABG) 259.10p +4.73%
Imagination Technologies Group (IMG) 203.60p +4.46%
Genus (GNS) 1,018.00p +4.30%
Kazakhmys (KAZ) 267.00p +4.13%
Interserve (IRV) 729.00p +2.89%
Centamin (DI) (CEY) 51.00p +2.82%
Partnership Assurance Group (PA.) 138.40p +2.52%
Alent (ALNT) 313.90p +2.48%
FTSE 250 - Fallers
Cairn Energy (CNE) 164.70p -3.00%
esure Group (ESUR) 278.10p -2.80%
Atkins (WS) (ATK) 1,379.00p -1.85%
Spirent Communications (SPT) 98.40p -1.55%
ITE Group (ITE) 189.90p -1.50%
Fisher (James) & Sons (FSJ) 1,475.00p -1.47%
Halfords Group (HFD) 454.80p -1.37%
Carphone Warehouse Group (CPW) 326.90p -1.24%
Essentra (ESNT) 859.50p -1.15%
Galliford Try (GFRD) 1,325.00p -1.12%