Leading shares moved higher after better than feared Chinese growth figures lifted the mining sector, while hopes of quantitative easing from the European Central Bank this week also helped sentiment.
But consumer goods groups were among the fallers, with Unilever down 60p at £26.69 after the Dove soap to Ben & Jerry’s group reported lower than expected fourth quarter sales growth of 2.1%. Analysts had forecast a figure of 2.6%, and the company blamed the shortfall on weakness in emerging markets.
On the same theme Coca-Cola Hellenic Bottling has fallen 55p to £10.67 after JP Morgan Cazenove moved to neutral from overweight, citing the deteriorating economic situation in Russia and Nigeria. There is also the uncertainty over this week’s Greek election.
Overall though, the FTSE 100 has climbed 22.39 points to 6607.92, following news that China’s economy grew by 7.4% in 2014, below the country’s official 7.5% target. However many analysts had expected a lower figure, so the news has given a boost to the mining sector, given the country’s position as a key consumer of commodities. The UK index is heading for its highest level since the end of December, despite the IMF joining the chorus of commentators cutting global growth forecasts.
Anglo American has added 22.5p to £11.12 while Glencore, a particularly weak market of late, is up 3.5p to 251.2p. Vedanta Resources, hit recently by concerns about its prospects, has risen 25.9p to 422.9p.
An exception is Rio Tinto, down 7p at £28.49. The mining group reported a rise in iron ore output but missed expectations for copper production. Yuen Low at Shore Capital said:
Despite the press release’s upbeat tone, aside from iron ore, the fourth quarter of 2014’s production figures were generally lower across the board than the third quarter. Even then, iron ore production was behind consensus. We expect a red day for the shares today.
Elsewhere banking shares are up despite the Financial Conduct Authority saying consumers get poor value from savings accounts and find it hard to switch to rival providers. Barclays is 5.15p better at 235.15p and Royal Bank of Scotland has risen 6.4p to 375.4p.
Among the mid-caps William Hill, which rushed out figures late on Monday after they had apparently been send out early by mistake, is down 12.6p at 364p. The bookmaker reported an 11% rise in full year profits, but said it had a tough fourth quarter and a difficult start to the new year, with recent football results proving “highly unfavourable.” In a hold note, Peel Hunt said:
Although 2014 is slightly ahead of expectations the trading update was still a curate’s egg. Furthermore, the announcement also highlighted some of the headwinds faced by the group (and industry in general) and the impact on profitability. William Hill is well positioned overall but the short-term political risk (General Election in May) and cost pressures means there is little reason to be more positive at this stage.
Afren, awaiting an offer from Nigeria’s Seplat, is down 0.9p at 26.75p after New Horizon Oil and Gas said it did not intend to make an offer for Afren despite reports suggesting it could be a possible target.
But Petrofac has put on 28p to 654p after the oil and gas services group said a consortium it leads had won a $4bn contract for a heavy oil project in Kuwait.
