London midday: Stocks boosted by stimulus hopes, Chinese imports

10th Apr 2013 11:37

Optimism regarding central-bank stimulus was driving gains on stock markets on Wednesday morning following recent comments from Japan and ahead of an announcement from the Federal Reserve later today.Investors were shrugging off a surprise trade deficit in China in March, as the data showed a strong rebound in imports. Export growth, however, was weak.Miners were doing well this morning in London due to an improved outlook for domestic demand in China. The sector performed strongly yesterday after data showed that Chinese inflation had slowed dramatically last month, sparking hopes that the People's Bank of China will hold off from tightening policy for the time being.Meanwhile, stock futures Stateside were pointing to a positive start on Wall Street in the coming hours, as the Dow Jones looks to extend its record closing high of 14,673.46 registered last night on the back of a decent start to US earnings season.Central banks in focusJapanese Prime Minister Shinzo Abe, who took office in December, said yesterday that "bold monetary easing" would turn persistent deflation into inflation in Japan. The news comes after last week's move by the Bank of Japan to double monthly bond purchases to achieve an annual inflation rate of 2.0% within two years.Traders are now turning their attention to the minutes of the latest Federal Open Market Committee (FOMC) meeting in the States which will be released later this evening following the decision to leave stimulus measures unchanged. Last week's gloomy US employment report - which revealed that the economy added just 88,000 jobs in March - has calmed fears that the FOMC will scale back its quantitative easing programme anytime soon."Last week's poor US jobs report indicates the need for continuous easing measures, combined with the fact that sequester cuts are kicking in as reflected in recent economic indicators," said Market Strategist Ishaq Siddiqi from ETX Capital.China records surprise deficitChina posted a trade deficit of $0.88bn in March, well below the surplus of $15.23bn in February, owing to a worse-than-expected slowdown in year-on-year export growth to just 10%, from 21.8% the month before. Analysts had expected a slightly narrower surplus of $15.15bn. Nevertheless, import growth of 14.1% came in well above forecasts after a 15.2% drop in February."A lot of questions have been raised about the Chinese trade data recently, based on the surprisingly strong export figures seen in the first two months of the year, which is why the impact on global markets is surprisingly minor," said Market Analyst Craig Erlam from Alpari."However, one positive that can be seen in the data is the improvement in imports which suggests domestic consumption is continuing to pick up. This is essential if China is going to maintain its high growth rates in the years to come as it makes the transition to more consumption driven growth rather than being overly reliant on its exports."FTSE 100: Airlines and miners provide a liftBudget airline easyJet surged early on after Citigroup upgraded the stock to 'buy' and raised its target price from 980p to 1,210p, saying that it expects strong profit growth and continued market-share gains this year.Sector peer IAG was also performing well after Credit Suisse kept its 'outperform' recommendation for the shares, saying that the pending acquisition of Vueling would "represent another significant positive step towards driving profitability in Spain".Mining stocks were on the up on hopes over Chinese domestic demand with Vedanta, EVRAZ, ENRC and Rio Tinto making decent gains. Vedanta was leading the way after reporting an increase in full-year production across oil and gas, copper, aluminium, lead and silver.Polymetal also rose after completing its acquisition of the Maminskoye gold deposit in the Sverdlovks region of Russia which it hopes will have "substantial exploration upside".Supermarket group Morrison was lower on reports that it could be cutting up to 700 back-office jobs.Engineering firm IMI was also among the fallers after going ex-dividend.FTSE 250: AZ Electronic rebounds...slightlyShares in chemicals group AZ Electronic Materials surged this morning by around 15%, though this only slightly made up for the near-35% slump yesterday after a profit warning. UBS upgraded the stock from 'neutral' to 'buy' this morning, saying that yesterday's sell-off was overdone and that the investment case remains intact.Engineer WS Atkins was also on the rise after saying that full-year results would come in ahead of expectations thanks to stronger second-half margins in the UK and US.FTSE 100 - RisersEurasian Natural Resources Corp. (ENRC) 276.10p +6.19%Vedanta Resources (VED) 1,172.00p +5.02%Evraz (EVR) 210.30p +4.37%easyJet (EZJ) 1,064.00p +4.11%Barclays (BARC) 296.75p +3.76%International Consolidated Airlines Group SA (CDI) (IAG) 245.60p +3.54%Royal Bank of Scotland Group (RBS) 282.50p +3.14%Prudential (PRU) 1,058.00p +2.82%Aviva (AV.) 309.50p +2.65%Lloyds Banking Group (LLOY) 48.40p +2.59%FTSE 100 - FallersInterContinental Hotels Group (IHG) 1,894.00p -1.41%Randgold Resources Ltd. (RRS) 5,415.00p -0.82%IMI (IMI) 1,216.00p -0.82%Morrison (Wm) Supermarkets (MRW) 277.10p -0.79%Tullow Oil (TLW) 1,179.00p -0.67%Associated British Foods (ABF) 1,839.00p -0.54%BG Group (BG.) 1,125.00p -0.49%Weir Group (WEIR) 2,260.00p -0.44%Tesco (TSCO) 376.85p -0.44%GlaxoSmithKline (GSK) 1,532.50p -0.42%FTSE 250 - RisersAZ Electronic Materials SA (DI) (AZEM) 277.00p +15.42%Ferrexpo (FXPO) 198.10p +7.14%Kazakhmys (KAZ) 419.60p +6.63%Heritage Oil (HOIL) 183.00p +4.51%Petropavlovsk (POG) 216.90p +3.93%Supergroup (SGP) 670.00p +3.63%Man Group (EMG) 96.95p +3.47%Carillion (CLLN) 286.00p +3.40%FirstGroup (FGP) 213.70p +3.39%Inchcape (INCH) 508.50p +3.37%FTSE 250 - FallersAveva Group (AVV) 2,031.00p -3.33%Moneysupermarket.com Group (MONY) 180.40p -3.27%Berendsen (BRSN) 743.50p -3.19%Morgan Advance Materials (MGAM) 279.10p -2.92%RPS Group (RPS) 266.20p -2.92%Amlin (AML) 413.20p -2.66%Dunelm Group (DNLM) 826.50p -2.54%Savills (SVS) 500.00p -2.34%Rotork (ROR) 2,726.00p -2.01%Petra Diamonds Ltd.(DI) (PDL) 117.30p -1.68%BC