London midday: Chinese data provides a boost as traders look ahead to ECB

2nd Jun 2014 11:26

- Mining stocks lead gains after China manufacturing PMI- UK, Eurozone manufacturing PMIs ease- ECB in focus ahead of Thursday's meeting- Supermarket, insurance stocks lead the fallerstechMARK 2,824.10 +0.42%FTSE 100 6,863.67 +0.28%FTSE 250 16,084.94 +0.47%An improvement in Chinese factory data gave UK stocks a lift on Monday, with the heavyweight mining sector leading the rise in London despite weakness among supermarket and insurance shares.However, gains for the FTSE 100 were only modest with global indices trading close to, or even at, all-time highs ahead of possible stimulus measures to be announced by the European Central Bank (ECB) later this week. The UK benchmark index was up 0.3% at 6,864 by noon, just a handful of points below the 14-year closing high of 6,878.49 reached last month."The ECB is widely expected to loosen monetary policy at the meeting on Thursday, which is likely to support risk appetite in the early part of the week," said Market Analyst Craig Erlam from Alpari. "I don't expect traders to get too carried away with this though as the scale of the potential stimulus is difficult to predict and, based on recent action from the ECB, is unlikely to be overly aggressive."The all-important US jobs report on Friday is also likely to keep risk appetite in check over the next coming days.Chinese manufacturing growth improvesChina's 'official' manufacturing sector purchasing managers' index (PMI) rose to 50.8 in May, up from 50.4 the month before, according to the National Bureau of Statistics and China Federation of Logistics and Purchasing. Growth came in at a five-month high and was slightly better than the 50.7 consensus forecast.Nevertheless, enthusiasm was tempered slightly by the news that Chinese house prices fell for the first time in nearly two years in May. Average prices for new homes across 100 major Chinese cities decreased by 0.32% over the month to 10,978 yuan (£1,050) per square metre, the China Index Academy said. China's property sector accounts for 16% of gross domestic product.In the UK, Markit's manufacturing PMI eased from 57.3 to 57 last month. However, this was expected by analysts by marked the 15th straight month of growth for the sector. On a less positive note, the final reading of May's Eurozone manufacturing PMI was revised down from 52.5 to 52.2. This was down from April's reading of 53.4 and surprised economists who had expected the initial estimate to remain unchanged.Miners rise, but supermarkets and insurers fallMining stocks such as Anglo American, Rio Tinto and Glencore were among the best performers this morning on renewed hopes for the Chinese economy. Rio announced this morning that it has completed the $1.02bn sale of its majority interest in the Clermont Mine in Australia, leaving buyer Glencore in charge.Supermarket giants Tesco, J Sainsbury and WM Morrison were all trading lower after some gloomy comments from Oriel Securities. Ahead of Tesco's first-quarter results on Wednesday, Oriel estimated that the negative trend of like-for-like sales will have worsened and said that low food inflation - as a result of ongoing price cuts at UK grocers - is "bad news for 'Big 4' top lines".Insurance stocks such as Standard Life were out of favour after reports suggested that the pension industry in the UK could undergo yet more reforms after the annuities shake-up in March. Investors were reacting to speculation about a potential Dutch-style collective pension scheme, which would reduce risks for pensioners but could be less lucrative for providers.Property regeneration specialist St. Modwen Properties rose after saying strong momentum had continued with a growing pipeline of development opportunities. The outlook for the full year was unchanged, though profits in the first half were said to be significantly ahead of last year.Fund manager Man Group gained after Berenberg raised its rating on the shares from 'sell' to 'hold', saying that the "enormous" restructuring efforts of the last three years are set to pay off.Housebuilder Barratt Developments was on the rise as analysts at Goldman Sachs upgraded the company from 'neutral' to 'buy' after the stock's recent weakness.FTSE 100 - RisersCoca-Cola HBC AG (CDI) (CCH) 1,421.00p +3.57%Barratt Developments (BDEV) 365.40p +2.30%easyJet (EZJ) 1,557.00p +1.76%BAE Systems (BA.) 430.40p +1.73%Anglo American (AAL) 1,481.50p +1.65%Shire Plc (SHP) 3,470.00p +1.64%Rio Tinto (RIO) 3,106.00p +1.60%International Consolidated Airlines Group SA (CDI) (IAG) 399.80p +1.58%Glencore (GLEN) 328.35p +1.55%AstraZeneca (AZN) 4,345.00p +1.44%FTSE 100 - FallersStandard Life (SL.) 390.10p -2.48%Sainsbury (J) (SBRY) 339.40p -1.94%Sports Direct International (SPD) 776.00p -1.33%Smith & Nephew (SN.) 1,033.00p -1.24%Morrison (Wm) Supermarkets (MRW) 199.50p -1.09%Tesco (TSCO) 300.65p -0.96%Associated British Foods (ABF) 2,996.00p -0.73%SABMiller (SAB) 3,289.50p -0.65%GlaxoSmithKline (GSK) 1,591.50p -0.59%Lloyds Banking Group (LLOY) 77.44p -0.54%FTSE 250 - RisersJD Sports Fashion (JD.) 1,673.00p +3.72%Ophir Energy (OPHR) 264.50p +2.92%Home Retail Group (HOME) 193.70p +2.81%St. Modwen Properties (SMP) 378.80p +2.68%Carillion (CLLN) 363.40p +2.60%Man Group (EMG) 102.80p +2.49%Afren (AFR) 156.00p +2.23%Serco Group (SRP) 379.50p +2.13%NMC Health (NMC) 495.00p +2.06%Moneysupermarket.com Group (MONY) 180.60p +2.03%FTSE 250 - FallersXaar (XAR) 827.00p -4.28%Fenner (FENR) 340.00p -2.86%Pace (PIC) 367.10p -2.16%Redefine International (RDI) 57.95p -2.11%Close Brothers Group (CBG) 1,303.00p -1.81%Just Retirement Group (JRG) 150.10p -1.70%Genus (GNS) 1,052.00p -1.68%Kentz Corporation Ltd. (KENZ) 715.50p -1.58%Evraz (EVR) 103.30p -1.43%Aveva Group (AVV) 2,207.00p -1.43%BC