London midday: Mining stocks push FTSE 100 to five-week high, Serco drops

10th Nov 2014 11:27

UK stocks started the new trading week on the front foot with mining shares resilient despite some mixed economic data from China overnight.However, Serco was the standout mover with the FTSE 250 outsourcing stock losing as much as a third of its value after a profit warning and proposed rights issue.The UK's benchmark FTSE 100 index was up 0.4% at 6,593 by midday after settling at 6,546.24 on Friday, its highest finish since 6 October."The thin economic data calendars for the first couple of the days of the week have seen equities revert back to the bullish mindset prevalent from last week," said Alastair McCaig, market analyst at IG.Nevertheless, macro indicators from China were in focus as the trade surplus widened more than expected in October from $31bn to $45.41bn, albeit mainly because of slowing import growth. Meanwhile, the annual rate of Chinese consumer-price index (CPI) inflation held steady at 1.6% last month, while producer-price index (PPI) deflation worsened from -1.8% to -2.2%.However, analyst Craig Erlam from Alpari UK said the mixed data was a "win-win from the markets perspective"."With the PPI falling 2.2% on the year, again due to weaker prices in commodity imports, this is both positive for corporate profitability while the CPI reading is well below the People's Bank of China's 3.5% target, opening the door to further targeted stimulus," he said.Economic data is likely to be thin on the ground over the next two trading sessions, though things will pick up on Wednesday with the release of the Bank of England's (BoE) quarterly Inflation Report.The BoE is expected to lower its growth and inflation forecasts, which could push back some economists' expectations for the first rate hike.Serco plummets, Cairn jumpsUnder-pressure business-to-government (B2G) outsourcing group Serco saw shares sink 31% as the company delivered a profit warning to investors and said it is planning a rights issue after writing down the value of its business by £1.5bn.Regarding the impairments, chief executive Rupert Soames said: "Whilst it is a bitter pill, it is better for all concerned that we swallow it now and establish a really solid foundation on which to build Serco's future."The news also dragged B2G outsourcing peers G4S and Capita firmly lower.Leading the upside on the FTSE 250 was Cairn Energy as the oil explorer announced a "significant" find off the coast of Senegal, with preliminary estimates pointing to commercial viability.Mining stocks were performing well on the whole, including blue chips Anglo American, Antofagasta, Randgold, Fresnillo and Glencore.Even platinum producer Lonmin was making gains despite saying that full-year underlying profits sank 71% as a result of a five-month strike in South Africa, which curtailed production and sent costs soaring.Supermarket rivals Tesco and Wm Morrison were also among the best performers, but J Sainsbury was in the red ahead of the results of its strategic review due out this week. Market MoverstechMARK 2,790.64 +0.23%FTSE 100 6,592.91 +0.39%FTSE 250 15,495.40 +0.20%FTSE 100 - RisersFresnillo (FRES) 758.00p +3.27%Petrofac Ltd. (PFC) 1,146.00p +2.50%Tesco (TSCO) 188.80p +2.36%Antofagasta (ANTO) 720.00p +2.35%Marks & Spencer Group (MKS) 475.90p +2.08%Morrison (Wm) Supermarkets (MRW) 171.60p +1.90%Shire Plc (SHP) 4,247.00p +1.82%Randgold Resources Ltd. (RRS) 4,204.00p +1.74%BHP Billiton (BLT) 1,701.50p +1.52%Meggitt (MGGT) 483.40p +1.51%FTSE 100 - FallersSainsbury (J) (SBRY) 256.50p -1.95%Hargreaves Lansdown (HL.) 1,027.00p -1.44%Hammerson (HMSO) 598.50p -1.32%Admiral Group (ADM) 1,199.00p -1.32%Coca-Cola HBC AG (CDI) (CCH) 1,344.00p -1.18%Royal Mail (RMG) 458.00p -1.06%G4S (GFS) 261.90p -1.06%British Land Co (BLND) 720.00p -1.03%Dixons Carphone (DC.) 399.60p -0.94%Capita (CPI) 1,094.00p -0.82%FTSE 250 - RisersCairn Energy (CNE) 175.50p +11.15%Kaz Minerals (KAZ) 254.70p +6.35%Ocado Group (OCDO) 325.70p +6.06%Aveva Group (AVV) 1,469.00p +5.30%Lonmin (LMI) 195.90p +4.54%EnQuest (ENQ) 73.00p +4.43%Hochschild Mining (HOC) 102.50p +3.59%Wood Group (John) (WG.) 693.00p +3.28%Just Retirement Group (JRG) 129.50p +3.19%Polymetal International (POLY) 551.50p +3.18%FTSE 250 - FallersSerco Group (SRP) 219.70p -30.72%Redrow (RDW) 265.10p -2.93%Diploma (DPLM) 703.00p -2.36%Stock Spirits Group (STCK) 242.20p -2.14%Brit (BRIT) 252.50p -2.13%Fenner (FENR) 311.00p -1.83%Zoopla Property Group (WI) (ZPLA) 203.00p -1.79%Mitie Group (MTO) 294.40p -1.67%Ted Baker (TED) 2,055.00p -1.67%Halfords Group (HFD) 477.50p -1.59%