LONDON (ShareCast) - - Miners gain on Chinese optimism
- OBR cuts GDP forecasts
- US ISM data lifts markets in afternoon trade

The Footsie finished the day with decent gains on Wednesday as investors mostly shrugged off Chancellor George Osborne’s budget statement, with the upbeat mood helped by economic data from the US and increasing optimism about China.

“UK financial markets were largely unruffled by the Chancellor’s Autumn Statement,” said analyst Julian Jessop from Capital Economics.

In this regard, the Office for Budget Responsibility (OBR) estimated that today's policy announcements would only provide a very modest boost to economic growth in 2013 and 2014 (0.1 percentage in each year), less even than what is now expected from the Funding for Lending Scheme.

“It’s taking time but the British economy is healing,” Osborne told MPs today, as revised figures from the Office for Budget Responsibility (OBR) mean that the government looks unlikely to achieve its target of reducing public sector net debt (PSND) as a share of GDP in 2015-16.

In fact, the OBR now forecasts gross domestic product (GDP) to fall by 0.1% in 2012 and then to grow by 1.2% in 2013, revised down from March estimates of 0.8% growth in 2012 and 2.0% in 2013.

“The GDP growth projections were a bit worse than expected and austerity was extended another year, to 2017/18, although Mr Osborne seemed sanguine about the possibility of missing his target of getting debt as a share of GDP falling by 2015/16,” Jessop added.

Wall Street opened higher this afternoon after the US ISM service-sector purchasing managers’ index rose to 54.7 in November, from 54.2 the month before. The figure came in better than the 53.5 consensus estimate.

Concerns over the ‘fiscal cliff’ continue to weigh on investors’ minds, however as market strategist Ishaq Siddiqi from ETX Capital explained: “for today, markets are putting that to the side, perhaps comfortable with the fact political posturing from both Democrats and Republicans alike is to be expected until its crunch time and they have no choice but to whack out an agreement.”

Meanwhile, hopes for the Chinese economy improved today after regulators in the country dropped a rule that limited insurers’ investments in banks. Furthermore, the think-tank, Chinese Academy of Social Sciences, predicted that Chinese economic growth would quicken to 8.2% in 2013, from an estimate expansion of 7.7% this year.

FTSE 100 movers: Miners lead the way

Mining stocks were performing well today on increasing optimism about China; Vedanta, Kazakhmys, Anglo American and Rio Tinto were all making decent gains. Precious metals giant Polymetal also advanced after saying it was giving $191m dollars back to shareholders by way of a special dividend.

Supermarket titan Tesco was a high riser after announcing that it is considering a sale of its loss-making US division, Fresh & Easy. The news came alongside the group's third-quarter trading statement, in which it revealed a better-than-expected performance in the UK grocery division, though non-food sales continue to be weak.

Global banking giant HSBC was higher after saying that it is to receive $9.39bn from the sale of its 15.57% stake in Chinese insurance giant Ping An Insurance.

Meanwhile, accountancy software group Sage fell after reporting that it had grown revenues slightly over the past year, but said it was keeping a close eye on conditions in Europe, particularly France.

Oil giant Tullow fell after Credit Suisse cut its target price for the stock from 1,650p to 1,550p following Tuesday's news that the no commercial hydrocarbons were found at the Zaedyus-2 appraisal well, offshore French Guiana.

Aberdeen Asset Management, SABMiller and Severn Trent were also among the fallers after going ex-dividend.

Land Securities declined somewhat after the previous day's strong gains on the back of its announcement that it would spend well over £100m to take control of entertainment firm X-Leisure.

FTSE 250 movers: Home Retail rises on upgrade

Shares in Argos and Homebase owner Home Retail raced ahead today after Bank of America Merill Lynch upgraded the stock from 'neutral' to 'buy' and hiked its price target from 110p to 130p.

The broker said: “We see Argos as a beneficiary of recent capacity withdrawal in the electricals area and also as we think grocers will now be more focused on improving their performance in food.”

Public transport firm Stagecoach was wanted after saying that like-for-like revenue grew 5.9% in the half year to October and revenue growth in the second half is expected to be "relatively modest".

Meanwhile, mining group Centamin was significantly lower and leading the fallers, with the movement possibly linked to news that Egypt's Vice President, Mahmoud Mekki, has decided that he will push ahead with a referendum on a draft constitution, despite protests scaling up. Strong concerns have been voiced by protesters that the constitution does not offer enough protection for political freedoms.

Halfords was down after Bank of America downgraded the stock from ‘buy’ to ‘neutral’.

Online gaming firm Bwin.party fell after saying that Jim Ryan, its co-CEO, is to retire from the role in January and return to Canada with his family.


FTSE 100 - Risers
Kazakhmys (KAZ) 740.50p +3.71%
Tesco (TSCO) 337.45p +3.31%
Rio Tinto (RIO) 3,226.00p +3.05%
Vedanta Resources (VED) 1,094.00p +2.63%
Anglo American (AAL) 1,780.00p +2.48%
Eurasian Natural Resources Corp. (ENRC) 277.20p +2.44%
BHP Billiton (BLT) 1,998.00p +2.38%
Resolution Ltd. (RSL) 245.50p +2.25%
ITV (ITV) 103.20p +1.98%
Shire Plc (SHP) 1,887.00p +1.73%

FTSE 100 - Fallers
Sage Group (SGE) 300.40p -3.47%
Tullow Oil (TLW) 1,254.00p -2.94%
Severn Trent (SVT) 1,572.00p -2.54%
Carnival (CCL) 2,410.00p -1.43%
Associated British Foods (ABF) 1,465.00p -1.41%
ARM Holdings (ARM) 752.00p -1.31%
British American Tobacco (BATS) 3,278.00p -1.24%
Land Securities Group (LAND) 807.50p -1.10%
Aberdeen Asset Management (ADN) 334.30p -1.09%
Kingfisher (KGF) 271.00p -1.06%

FTSE 250 - Risers
JD Sports Fashion (JD.) 750.00p +7.91%
Savills (SVS) 480.00p +7.38%
Home Retail Group (HOME) 121.00p +6.80%
Stagecoach Group (SGC) 308.70p +5.86%
Ted Baker (TED) 1,073.00p +5.51%
Ocado Group (OCDO) 74.45p +4.86%
Diploma (DPLM) 510.00p +4.44%
New World Resources A Shares (NWR) 275.00p +3.58%
EnQuest (ENQ) 116.90p +3.45%
Dechra Pharmaceuticals (DPH) 594.50p +3.39%

FTSE 250 - Fallers
Centamin (DI) (CEY) 51.75p -9.37%
Halfords Group (HFD) 323.20p -4.46%
Britvic (BVIC) 387.10p -3.23%
Ruspetro (RPO) 80.00p -3.09%
Computacenter (CCC) 389.00p -2.36%
Moneysupermarket.com Group (MONY) 160.00p -2.26%
Big Yellow Group (BYG) 338.40p -2.20%
Lonmin (LMI) 253.50p -2.16%
De La Rue (DLAR) 950.00p -2.01%
Afren (AFR) 131.40p -1.94%

BC

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