London open: Chinese demand hopes drive markets higher early on

10th Apr 2013 08:20

Stocks started Wednesday's session with decent gains, tracking Asian markets higher after on the back of optimism regarding central-bank stimulus.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 performing well this morning in London on the back 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.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 jobs report has calmed fears that the Fed will scale back its quantitative easing programme anytime soon.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, citing long-term free cash flow generation.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 100 - RiserseasyJet (EZJ) 1,060.00p +3.72%Barclays (BARC) 296.25p +3.58%Eurasian Natural Resources Corp. (ENRC) 269.00p +3.46%International Consolidated Airlines Group SA (CDI) (IAG) 244.80p +3.20%Vedanta Resources (VED) 1,149.00p +2.96%Royal Bank of Scotland Group (RBS) 280.90p +2.56%Evraz (EVR) 206.50p +2.48%Prudential (PRU) 1,053.00p +2.33%Polymetal International (POLY) 904.50p +2.09%Lloyds Banking Group (LLOY) 48.15p +2.06%FTSE 100 - FallersIMI (IMI) 1,209.00p -1.39%InterContinental Hotels Group (IHG) 1,903.00p -0.94%BG Group (BG.) 1,121.00p -0.84%Randgold Resources Ltd. (RRS) 5,425.00p -0.64%AstraZeneca (AZN) 3,292.50p -0.56%Morrison (Wm) Supermarkets (MRW) 278.10p -0.43%TUI Travel (TT.) 301.50p -0.43%Tullow Oil (TLW) 1,183.00p -0.34%GlaxoSmithKline (GSK) 1,534.00p -0.32%Shire Plc (SHP) 1,942.00p -0.15%FTSE 250 - RisersAZ Electronic Materials SA (DI) (AZEM) 271.30p +13.04%Petropavlovsk (POG) 220.50p +5.65%Heritage Oil (HOIL) 183.00p +4.51%Kazakhmys (KAZ) 406.70p +3.35%Ferrexpo (FXPO) 190.40p +2.97%Anite (AIE) 118.90p +2.94%Hochschild Mining (HOC) 296.90p +2.70%African Barrick Gold (ABG) 207.50p +2.67%Lonmin (LMI) 302.40p +2.51%Imagination Technologies Group (IMG) 451.60p +2.01%FTSE 250 - FallersSavills (SVS) 495.00p -3.32%Amlin (AML) 410.40p -3.32%Barr (A.G.) (BAG) 535.00p -3.25%Morgan Advance Materials (MGAM) 280.50p -2.43%Rotork (ROR) 2,718.00p -2.30%Berendsen (BRSN) 751.00p -2.21%Kenmare Resources (KMR) 29.35p -2.17%Dunelm Group (DNLM) 831.00p -2.00%RPS Group (RPS) 268.90p -1.93%Ophir Energy (OPHR) 443.40p -1.58%BC