London midday: FTSE maintains gains as China stimulus hopes lift miners
By Michele Maatouk
Date: Monday 09 Dec 2024
(Sharecast News) - London stocks were still in the black by midday on Monday as hopes of further stimulus in China lifted the mining sector.
The FTSE 100 was up 0.3% at 8,335.39.
Sentiment got a boost after China's leaders pledged to implement "more proactive" fiscal policy next year to boost consumption.
The announcements, outlined in a key Politburo meeting led by president Xi Jinping, set the stage for broader economic priorities to be determined at the upcoming Central Economic Work Conference scheduled for 11-12 December.
According to CNBC, the Politburo emphasised strengthening "unconventional counter-cyclical" adjustments while stabilising the property and stock markets.
Joshua Mahony at Scope Markets said: "The week has kicked off on a largely upbeat tone following the welcome announcement that Chinese authorities plan to enact further stimulus over the year ahead. China's decision to adopt a 'moderately loose' monetary policy has ignited optimism across markets, with investors anticipating further easing measures to support the country's slowing economy.
"This shift has already fuelled sharp gains in key assets, with the Hang Seng surging 2.8% and commodities like copper, zinc, iron ore, and palladium rallying on expectations of increased demand.
"Attention now turns to the Central Economic Work Conference later this week, where additional fiscal and monetary signals are expected. While this policy adjustment is a step in the right direction, meaningful economic recovery will likely depend on the scale and speed of forthcoming fiscal support."
He also pointed to developments in the Middle East after the fall of Syrian president Bashar al-Assad's regime.
"The swift collapse of the Assad regime has provided the basis for fresh uncertainty in the Middle East, with traders seeking to gain a grasp of what the knock-on implications could be for markets," Mahony said.
"With everyone awaiting clarity over who and how the country will be run, we have seen a great degree of uncertainty as this pivotal region falls into new hands."
On the macro front, investors were digesting the latest data released by the Bureau of National Statistics in China, which showed that consumer price inflation fell to a five-month low in November, slowing to 0.2% year-on-year from 0.3% the month before. This fell short of expectations of 0.5%.
Core inflation - which excludes food and fuel prices - rose 0.3% in November, down from 0.2% in October.
In equity markets, heavily-weighted miners were among the best performers, with Glencore, Antofagasta, Anglo American and Rio Tinto all higher on China stimulus hopes, while luxury fashion brand Burberry also got a boost.
Advertising giant WPP rallied following reports that Omnicom and Interpublic are in $30bn merger talks.
Dan Coatsworth, investment analyst at AJ Bell, said: "Investors in WPP seemed to shrug off the prospect of two arch-rivals coming together and creating a force to be reckoned with.
"On one hand, a merger of two companies this size would inevitably involve widespread cost cutting as the first course of action. That could give WPP a window of opportunity to try and poach some clients while its enlarged rival's management is distracted.
"On the other hand, a merger would bring together the cream of the crop from both companies which would aid their narrative during account pitches."
Spirax and Weir were both higher after upgrades to 'overweight' by Morgan Stanley, while AJ Bell rose after an upgrade to 'buy' at Shore Capital.
IP Group gained as it said it plans to increase its share buyback plan after raising £15m from the sale of minority holdings in several portfolio companies.
Domino's Pizza fell as it said new measures announced in October's Budget would cost it around £3m a year and announced a new "profitability and growth framework" with its franchise partners, that will see it invest an additional £3-4m per annum from next year.
Baltic Classifieds fell after a downgrade to 'hold' at Deutsche Bank.
Mike Ashley's Frasers Group was in the red after Boohoo said that international shareholder advisory group ISS has recommended that its shareholders vote against resolutions seeking board representation from the company.
Boohoo is due to hold a general meeting on 20 December at which shareholders will be asked whether they agree to admit Ashley and restructuring expert Mike Lennon to the board.
Market Movers
FTSE 100 (UKX) 8,335.39 0.32%
FTSE 250 (MCX) 21,033.46 -0.12%
techMARK (TASX) 4,697.16 -0.21%
FTSE 100 - Risers
Rio Tinto (RIO) 5,131.00p 4.20%
Antofagasta (ANTO) 1,803.00p 4.19%
Glencore (GLEN) 392.60p 3.86%
Anglo American (AAL) 2,547.00p 3.35%
WPP (WPP) 895.20p 3.18%
Standard Chartered (STAN) 1,001.00p 2.81%
BP (BP.) 388.05p 2.73%
Prudential (PRU) 679.20p 2.57%
Fresnillo (FRES) 672.00p 2.52%
Weir Group (WEIR) 2,298.00p 1.68%
FTSE 100 - Fallers
Frasers Group (FRAS) 622.50p -2.43%
BAE Systems (BA.) 1,200.00p -2.40%
Relx plc (REL) 3,665.00p -2.16%
CRH (CDI) (CRH) 7,948.00p -1.80%
Coca-Cola HBC AG (CDI) (CCH) 2,770.00p -1.49%
Whitbread (WTB) 2,944.00p -1.47%
Unite Group (UTG) 833.00p -1.42%
LondonMetric Property (LMP) 185.70p -1.38%
Land Securities Group (LAND) 586.00p -1.35%
Vodafone Group (VOD) 71.18p -1.30%
FTSE 250 - Risers
Fidelity China Special Situations (FCSS) 226.00p 4.87%
IP Group (IPO) 50.10p 3.94%
Bellevue Healthcare Trust (Red) (BBH) 139.20p 3.11%
Burberry Group (BRBY) 958.00p 3.03%
PureTech Health (PRTC) 170.80p 2.89%
PZ Cussons (PZC) 88.00p 2.80%
Energean (ENOG) 968.50p 2.54%
AJ Bell (AJB) 471.00p 2.28%
Dr. Martens (DOCS) 72.90p 1.96%
Johnson Matthey (JMAT) 1,412.00p 1.80%
FTSE 250 - Fallers
Baltic Classifieds Group (BCG) 331.50p -4.88%
Domino's Pizza Group (DOM) 339.40p -3.58%
Babcock International Group (BAB) 507.50p -2.68%
Shaftesbury Capital (SHC) 134.50p -2.39%
Workspace Group (WKP) 532.00p -2.21%
Inchcape (INCH) 761.00p -2.12%
FirstGroup (FGP) 151.70p -1.75%
Moonpig Group (MOON) 264.50p -1.67%
Bluefield Solar Income Fund Limited (BSIF) 95.00p -1.66%
North Atlantic Smaller Companies Inv Trust (NAS) 3,770.00p -1.57%
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