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London open: Stocks edge higher after decent China data
London stocks edged higher in early trade following the release of some encouraging Chinese trade figures, as oil prices gained ground.
At 0830 BST, the FTSE 100 index was up 0.5% to 6,881.71. At the same time, West Texas Intermediate was up 2.1% to $46.44 a barrel and Brent crude was 1.8% higher at $48.83.
The tone was underpinned by better-than-expected Chinese trade data, which showed imports rose 1.5% in August compared to a year ago, versus forecasts of a 4.9% decline. This was also a big improvement on the 12.5% fall seen in July. Meanwhile, exports dropped 2.8% following a 4.4% drop the month before.
Lee Wild, heady of equity strategy at Interactive Investor, said: “The post-Brexit bubble remains intact, with decent data out of China and rising oil prices triggering gains Thursday. Commodity plays are looking good and the FTSE 100 is less than 100 points from a new 15-month high.”
Meanwhile, investors were looking ahead to the European Central Bank’s rate announcement at 1245 BST.
CMC Markets‘ Jasper Lawler said: “Stock market trading has been muted so far this week but has the promise of a new spark of life from the European Central Bank. The central will announce its first policy decision since the Bank of England eased policy in August in response to concerns over Brexit.
“There is a chance of some central bank one-upmanship. The ECB could decide it wants to add stimulus in equal measure to the Bank of England to defend the Eurozone from any unwanted economic consequences of Brexit. Since ECB policy is already very accommodative and the BOE has taken some political flak for its decision to ease policy so soon after the referendum, the ECB is unlikely to make major changes. Via a downgrade to the ECB’s economic forecasts, Mario Draghi can hint at more stimulus if needed in the coming months.”
In corporate news, electronics retailer Dixons Carphone rose after it said group revenue was up 9% year-on-year in the first quarter and like-for-like revenue improved 4% in the 13 weeks to 30 July.
Micro Focus International surged after agreeing an $8.8bn deal to merge with Hewlett Packard’s software business, which includes a $400m return of value to the FTSE 100 company’s’ shareholders.
Zoopla Property Group was on the front foot as it said full-year operating profits will be at the top end of current market expectations thanks to solid property trading and outperformance from its price comparison website in the third quarter.
National Grid nudged higher after it agreed a three-year rate plan settlement for the KeySpan Energy Delivery New York and KeySpan Energy Delivery Long Island gas distribution utilities.
In the US, initial jobless claims are due at 1330 BST.
