LONDON (ShareCast) - Stocks were off their intraday highs by lunchtime but the Footsie was still some 26 points up from yesterday's close, helped by some cheery Chinese GDP data and a better-than-expected German confidence survey.

Fourth quarter gross domestic product (GDP) data from China was easing fears of a hard landing in the world's second largest economy. GDP expanded by 8.9% year-on-year, less than the 9.1% rise seen in the third quarter but well ahead of the 8.6% forecast.

The German ZEW economic sentiment index jumped strongly to -21.6 in January, from -53.8 the month before, and well above market forecasts of -49.8.

Investors seem to have shrugged off last night's downgrade of the European Financial Stability Facility (EFSF) by Standard & Poor's from 'AAA' to 'AA+'.

Meanwhile, the UK consumer price index (CPI) for the month of December rose 0.4% on the month (4.2% on the year), according to data just released by the Office for National Statistics, just as expected. Likewise, the latest core CPI numbers also met expectations, rising by 3.0% on the year.

BANKS, MINERS DRIFT HIGHER AFTER DATA

The risk-on attitude in morning trading continued by lunchtime, with banks and miners among the best performers in London. Leading the risers was nationalised lender Royal Bank of Scotland after striking a deal with a Japanese bank to sell its aircraft leasing division for $7.3bn (£4.7bn). The bank said the sale of RBS Aviation Capital to Sumitomo Mitsui Banking Corporation would strengthen its Tier 1 capital position and the proceeds would be used to reduce wholesale funding requirements and fund ongoing lending. Sector peer HSBC was also a high riser.

Miners were tracking metals prices higher on the back of the strong growth in China. Steel giant Evraz rose after seeing crude steel output rise 3% in 2011, helped by an increase in volumes in the Czech Republic. Vedanta Resources, Eurasian Natural Resources Corp and BHP Billiton were also firmer. Even Rio Tinto joined in on the act, despite seeing full-year global iron ore shipments come in below production due to bad weather.

Iconic British luxury brand Burberry was out of favour after seeing revenue growth slow down in the third quarter, while credit-checking firm Experian fell despite seeing underlying revenue growth across all geographies.

MID-CAP MOVERS: AFREN JUMPS ON OIL DISCOVERY

Africa focused oil exploration group Afren has this morning announced a significant new off-shore oil find just 2 kilometres east of its main site in Nigeria, in the Okoro field. The company has described the tertiary reservoir sands encountered as “excellent” and as being of a quality equivalent to those under development at its main Okoro field.

Electrical retailer Dixons roared higher after seeing a 23% jump in sales in the period from 4th to 14th January.

The recycled packaging firm, DS Smith, jumped after launching an agreed bid for SCA Packaging, the second biggest packaging business in Europe. DS Smith is paying €1.6bn (£1.3bn) for the Swedish company, excluding SCA's kraftliner assets, and the purchase will be funded from new and existing debt as well as an underwritten £466m rights issue.

Premier Foods, the firm behind brands such as Hovis, Sharwood's and Mr. Kipling, said it would cut 5% of its 12,000 strong workforce by 2013. Shares were up 13%. Westminster Group, the security solutions firm, leapt 41.5% in morning trading after announcing revenue growth of 260% in 2011 versus 2010.

BC

FTSE 100 - Risers
Royal Bank of Scotland Group (RBS) 25.40p +4.01%
Intertek Group (ITRK) 2,149.00p +3.07%
GKN (GKN) 207.40p +2.32%
Rio Tinto (RIO) 3,672.00p +2.31%
Tullow Oil (TLW) 1,460.00p +2.24%
Resolution Ltd. (RSL) 267.40p +2.06%
BHP Billiton (BLT) 2,120.50p +1.95%
Smiths Group (SMIN) 955.00p +1.87%
Weir Group (WEIR) 2,137.00p +1.86%
InterContinental Hotels Group (IHG) 1,241.00p +1.72%

FTSE 100 - Fallers
Compass Group (CPG) 599.00p -1.80%
Capita (CPI) 636.50p -1.70%
Burberry Group (BRBY) 1,278.00p -1.69%
Petrofac Ltd. (PFC) 1,522.00p -1.68%
RSA Insurance Group (RSA) 108.10p -1.64%
SABMiller (SAB) 2,296.00p -1.33%
Admiral Group (ADM) 870.50p -0.85%
Smith & Nephew (SN.) 591.00p -0.84%
Vodafone Group (VOD) 174.45p -0.80%
Bunzl (BNZL) 873.00p -0.80%

FTSE 250 - Risers
Afren (AFR) 130.50p +13.48%
Dixons Retail (DXNS) 11.16p +12.84%
Misys (MSY) 287.00p +8.02%
Anglo Pacific Group (APF) 289.10p +6.36%
Supergroup (SGP) 630.00p +6.24%
Inchcape (INCH) 324.90p +6.04%
Elementis (ELM) 155.20p +5.58%
Imagination Technologies Group (IMG) 563.00p +5.04%
DS Smith (SMDS) 213.60p +4.91%
CSR (CSR) 216.20p +4.44%

FTSE 250 - Fallers
Kenmare Resources (KMR) 48.00p -2.28%
Genus (GNS) 1,038.00p -2.26%
Allied Gold Mining (ALD) 157.90p -1.86%
Soco International (SIA) 288.70p -1.50%
TalkTalk Telecom Group (TALK) 131.10p -1.43%
FirstGroup (FGP) 311.40p -1.42%
Mitie Group (MTO) 262.80p -1.39%
Exillon Energy (EXI) 267.30p -1.22%
Stobart Group Ltd. (STOB) 122.00p -1.21%
Beazley (BEZ) 135.80p -1.02%

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