- Stocks gain as Chinese exports beat forecasts
- EU summit in focus
- Goldman downgrades several UK-listed miners
UK stocks edged higher in early trading on Monday on the back of some robust export data from China, though gains were only modest as uncertainty in the Eurozone continues to be a drag on sentiment.
Chinese exports increased at an annual rate of 9.9% in September, well ahead of the prior month's 2.7% rise and better than the consensus estimate of a 5.5% gain. Imports, up 2.4% year-on-year, were in line with expectations.
Meanwhile, inflation figures were broadly in line with estimates: consumer price inflation decreased to an annual rate of 1.9% (from 2% in August), while the producer price index fell 3.6% (down from -3.5%).
"European equity market trading are trading little changed this morning despite news out of China that exports having risen in the past months almost twice as fast as expected providing the first hint that the downward momentum might be coming to an end and that the economy is finally stabilising," said Markus Huber from ETX Capital.
"Also with inflation continuing to fall according to the latest data all eyes will be now on Thursday's GDP figures where a weak number could pave the way for further rate cuts and more stimulus in general."
Meanwhile, the focus on stock markets this week will likely be on the meeting of European Union leaders. "Before the EU summit on Thursday, Greece is expected to submit its spending cuts worth €13.5bn to the EU leaders. If agreed upon by the EU, the next tranche of the bailout will be released, essentially funding Greece past November," explained analyst Craig Erlam from Alpari.
Meanwhile, pressure continues to mount on Spanish Prime Minister Mariano Rajoy, who is widely expected to request a bailout from the European Central Bank (ECB) in the coming weeks. Eyes are also on Portugal as it presents its 2013 budget.
FTSE 100: RBS drops after Santander pulls out
Part-nationalised lender Royal Bank of Scotland (RBS) fell this morning after confirming that Spanish banking giant Santander is going back on its agreement to purchase 316 RBS branches in the UK.
Heading the other way was sweeteners and food products group Tate & Lyle after Jefferies upgraded the stock from 'hold' to 'buy' and hiked its target price from 690p to 800p. The broker said this morning that it sees improved earnings from 2014 on better execution in the SFI division, improved sucralose pricing and realisation of £75m platform synergies.
"We argue that the company has laid a strong foundation for a sustainable growth profile and see the current valuation as a compelling buying opportunity to enjoy future re-rating towards specialty peers on c 15x," Jefferies said.
Goldman Sachs was dampening the mood in the mining sector this morning after downgrading its ratings for a host of resource stocks. The US bank cut its recommendation for Antofagasta, Evraz, Kazakhmys, Anglo American, Rio Tinto and BHP Billiton this morning.
Telecoms group BT was also a heavy faller after Barclays Capital lowered its rating to 'equal weight' and cut its target price for the shares
from 260p to 230p.
Irish oil titan Tullow Oil gained after saying that it is to take a stake in Block 9 (Tooq licence), Baffin Bay, north-western Greenland, which is operated by Maersk Oil.
FTSE 250: SDL sinks on potential lawsuit costs
Information management firm SDL fell after warning that ongoing litigation with a former Trados shareholder on the sale of Trados to SDL in 2005 could lead to costs of up to $3m. "The SDL board believes the case to be completely without merit. We anticipate that the case will progress to a court hearing in 2013," the group explained in a company statement.
Foam products supplier Filtrona was in demand after firing on all cylinders in the third quarter with like-for-like sales up by one-tenth year-on-year.
ickel and zinc miner Talvivaara was unwanted after saying that heavy rainfall in the third quarter is proving a major obstacle in its aim of mining 17,000 tonnes of nickel this year.
FTSE 100 - Risers
Hargreaves Lansdown (HL.) 733.00p +2.95%
Compass Group (CPG) 692.00p +1.69%
ITV (ITV) 90.80p +1.40%
Reckitt Benckiser Group (RB.) 3,657.00p +1.30%
Kingfisher (KGF) 271.80p +1.23%
Whitbread (WTB) 2,378.00p +1.23%
Lloyds Banking Group (LLOY) 40.16p +1.17%
Standard Chartered (STAN) 1,444.00p +1.16%
Tullow Oil (TLW) 1,420.00p +1.14%
SABMiller (SAB) 2,687.50p +1.07%
FTSE 100 - Fallers
BT Group (BT.A) 214.70p -1.83%
Kazakhmys (KAZ) 708.00p -1.05%
Rio Tinto (RIO) 2,992.00p -0.99%
Fresnillo (FRES) 1,928.00p -0.62%
Royal Bank of Scotland Group (RBS) 269.30p -0.59%
Shire Plc (SHP) 1,801.00p -0.39%
Vedanta Resources (VED) 1,081.00p -0.37%
ARM Holdings (ARM) 576.50p -0.35%
Vodafone Group (VOD) 174.20p -0.34%
Eurasian Natural Resources Corp. (ENRC) 327.80p -0.33%
FTSE 250 - Risers
Ruspetro (RPO) 105.30p +3.24%
Petra Diamonds Ltd.(DI) (PDL) 102.60p +2.60%
Kentz Corporation Ltd. (KENZ) 418.90p +2.42%
Filtrona PLC (FLTR) 521.00p +2.16%
Rentokil Initial (RTO) 86.90p +2.00%
Travis Perkins (TPK) 1,115.00p +1.92%
St James's Place (STJ) 381.80p +1.84%
Yule Catto & Co (YULC) 155.80p +1.83%
PayPoint (PAY) 778.00p +1.70%
Barratt Developments (BDEV) 179.90p +1.64%
FTSE 250 - Fallers
SDL (SDL) 594.00p -7.19%
Talvivaara Mining Company (TALV) 139.50p -4.58%
NMC Health (NMC) 180.10p -3.28%
Chemring Group (CHG) 334.10p -2.51%
Investec (INVP) 362.70p -1.92%
Domino Printing Sciences (DNO) 562.50p -1.66%
Rathbone Brothers (RAT) 1,322.00p -1.64%
Oxford Instruments (OXIG) 1,290.00p -1.53%
Devro (DVO) 328.50p -1.53%
Ocado Group (OCDO) 65.50p -1.43%