Positive data from China helped European stocks rebound on Friday morning, following a sell-off the day before on the back of comments from European Central Bank President (ECB) Mario Draghi.
Both imports and exports in China jumped year-on-year in January, "suggesting that what we saw in the fourth quarter of last year may not have been a blip in a longer term down trend," said market analyst Craig Erlam from Alpari.
Imports surged 28.8% on last year while exports rose 25%, beating the consensus estimates for increases of 23.5% and 17.5%, respectively. The trade surplus fell by less than expected from $31.6bn to $29.2bn, above the $26.6bn forecast.
Markets across Europe suffered steep falls on Thursday - London's FTSE 100 dropped 1.06% - after 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 said: "The appreciation is a sign of the return of the confidence in the euro. [...] We certainly want to see whether the appreciation, if sustained, will alter our risk assessment as far as price stability is concerned."
Senior market analyst Michael Hewson from CMC Markets said this morning that while Draghi's comments were "downbeat", "he has helped because the last thing Europe needs right now is a stronger currency".
Hewson said: "His comment that currency values should reflect fundamentals is a sound one; however that is a tricky balancing act when talking about the euro given the widely diverging fundamentals between Germany and the rest of Europe."
Weir and Aggreko lead the riser
Engineering group Weir was performing well this morning 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 results from sector peers Metso and Outotec.
Temporary power and temperature controls firm Aggreko was also higher after HSBC upgraded the stock to 'neutral'. There is also some 'market chatter' regarding how Aggreko could be a bid target for ABB, according to Killik Capital.
In contrast, 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."
On the FTSE 250, insurer Catlin was firmly lower despite raising its dividend after reporting that annual profit before tax surged from $71m to $339m.
Telecoms company C&W Comms was higher after saying it is on track to hit earnings guidance. Investors shrugged off the news that the company is to take a further $20m in restructuring costs after accelerating investments to improve efficiency and flexibility.
Chip group Imagination Technologies gained after completing the acquisition of the perating business and certain patent properties of MIPS Technologies, a provider of architectures and IP cores.
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.
FTSE 100 - Risers
Antofagasta (ANTO) 1,153.00p +2.58%
Weir Group (WEIR) 2,121.00p +2.07%
Vodafone Group (VOD) 175.10p +1.89%
Experian (EXPN) 1,103.00p +1.85%
Old Mutual (OML) 189.30p +1.83%
Aggreko (AGK) 1,585.00p +1.80%
Royal Bank of Scotland Group (RBS) 338.70p +1.74%
Anglo American (AAL) 1,970.50p +1.73%
Polymetal International (POLY) 1,071.00p +1.61%
Standard Chartered (STAN) 1,673.50p +1.42%
FTSE 100 - Fallers
Randgold Resources Ltd. (RRS) 6,065.00p -0.90%
Imperial Tobacco Group (IMT) 2,328.00p -0.81%
ITV (ITV) 116.40p -0.60%
Rexam (REX) 457.50p -0.59%
Kingfisher (KGF) 277.80p -0.43%
GlaxoSmithKline (GSK) 1,431.50p -0.42%
InterContinental Hotels Group (IHG) 1,896.00p -0.37%
G4S (GFS) 279.00p -0.29%
Severn Trent (SVT) 1,614.00p -0.25%
Smiths Group (SMIN) 1,222.00p -0.24%
FTSE 250 - Risers
Bwin.party Digital Entertainment (BPTY) 134.00p +14.82%
Playtech Ltd. (PTEC) 515.00p +5.17%
Heritage Oil (HOIL) 205.00p +2.50%
Workspace Group (WKP) 324.70p +2.43%
William Hill (WMH) 403.90p +2.28%
Barr (A.G.) (BAG) 550.00p +2.23%
Debenhams (DEB) 99.75p +1.99%
Computacenter (CCC) 480.00p +1.98%
Dixons Retail (DXNS) 26.90p +1.89%
Supergroup (SGP) 743.50p +1.85%
FTSE 250 - Fallers
Synthomer (SYNT) 189.88p -4.58%
F&C Asset Management (FCAM) 105.10p -3.13%
Catlin Group Ltd. (CGL) 527.50p -2.04%
New World Resources A Shares (NWR) 266.40p -1.48%
Big Yellow Group (BYG) 363.40p -1.46%
Fidessa Group (FDSA) 1,525.00p -1.23%
Lonmin (LMI) 372.50p -1.17%
Ophir Energy (OPHR) 470.00p -1.05%
COLT Group SA (COLT) 111.90p -0.97%
Kentz Corporation Ltd. (KENZ) 413.00p -0.96%