London open: Miners pace gains as Shanghai stocks bounce

9th Jul 2015 08:46

Miners led the top flight index higher thanks to an overnight bounce in Chinese equities, and as traders awaited fresh reform proposals out of Athens, due by midnight.As of 0836 BST the FTSE 100 was higher by 42.18 points to reach 6,532.06, while the Shanghai Stock Exchange's composite index closed up 5.76% to 3,709.33 points.About $3.9trn had been wiped off Chinese stocks' market value up to 8 July, more than the value of the entire London market.Nonetheless, some market commentators warned that it might just be a 'dead cat' bounce following several weeks of sharp drops and so-called forced selling in many asset classes. There was also some market chatter to be heard regarding the imminent risk of bankruptcies at Chinese banks or securities brokers.Closer to home, looming deadlines for Greece offered a little hope that a deal may finally be reached, said Jasper Lawler, Market Analyst at CMC Markets UK.However, "This hope may be misplaced," Lawler added."European creditors seem to think that the threat of the ECB pulling the plug on its emergency lending to Greek banks will spur Athens into signing off on terms they have previously rejected. With the referendum as backup, it seems more likely that Tsipras and co will take the threat of collapse back to the creditors."When asked by Italian daily Il Sole 24 Ore whether a final resolution of Greece's problems is possible European Central Bank president Mario Draghi said: "I don't know, this time it's really difficult."An increasingly insecure Fed?Traders were also expected to keep close tabs on a flurry of speeches in the afternoon from three rate-setters at the US Federal Reserve. That followed the release of a more dovish than expected set of Fed minutes on Wednesday evening.At their June meeting rate-setters at the US central bank said there was "uncertainty about whether Greece and its official creditors would reach an agreement and about the likely pace of economic growth abroad, particularly in China and other emerging market economies," the minutes of that meeting showed."Overall, we maintain our baseline outlook for a rate hike in September, given our conviction about incoming data and their signal about economic momentum. Nevertheless, an unusually insecure Fed and rising external risks certainly open the door for FOMC members to seize on any point of weakness or uncertainty to delay rate hikes," Barclays analyst Michael Gapen said in a research note e-mailed to clients.Also overnight, Chinese consumer prices advanced at a 1.4% year-on-year pace in June, up from the prior month's 1.2% pace and economists' forecast for a rise of 1.3%.The MPC was set to announce its latest policy decision at noon and the International Monetary Fund its latest macroeconomic projections.Homebuilder sees continued strong demandHousebuilder Barratt Developments said in a trading update that it expected to see a 45% increase in full-year pre-tax profit to £565m, from £390.6m last year amid continued strong demand in the housing market. For the year ended 30 June 2015, the average selling price for private homes was up around 8% to £262,000, driven by further changes in mix and underlying house price inflation.Balfour Beatty issued another profit warning, with pre-tax profit likely to be lower by between £120m to £150m due to problems discovered in various parts of the infrastructure construction group as part of a continuing business review.Recruitment firm Hays reported a strong second quarter as group net fee growth improved by 9% and said currency movements remained a challenge for the company. The job placement firm reiterated guidance it would deliver strong group profit for the full year, and said second half operating profits would be slightly ahead of the first half.Drax expects the removal of the Climate Change Levy exemption for renewable electricity generated after 1 August 2015, announced in Wednesday's Budget, to lead to a reduction in earnings before interest, tax, depreciation and amortisation of around £30m in 2015 and £60m in 2016.Revenues were flat at Primark owner Associated British Foods in the 40 weeks to 20 June, but up 2% against the same period last year if currency moves are ignored. An 8% increase in stores selling space helped sales at Primark rise 9%, or 13% at constant currency rates, although like-for-like sales were flat despite a positive UK LFL performance.Bwin.party confirmed AIM-listed rival GVC had tabled a cash and shares offer for the company. The bid valued Bwin, party at 110p per share, the company said in a statement. The board has determined to work with GVC so that they can finalise their offer over the coming days.WPP may team up with General Atlantic to make a bid for Tesco's Clubcard unit, according to Bloomberg.Market MoverstechMARK 3,098.40 +0.54%FTSE 100 6,532.07 +0.64%FTSE 250 17,184.46 +0.42%FTSE 100 - RisersSmith & Nephew (SN.) 1,110.00p +2.21%Rio Tinto (RIO) 2,539.00p +2.19%Anglo American (AAL) 864.00p +2.18%BHP Billiton (BLT) 1,211.00p +1.98%Hargreaves Lansdown (HL.) 1,112.00p +1.92%Glencore (GLEN) 242.15p +1.79%International Consolidated Airlines Group SA (CDI) (IAG) 502.50p +1.78%Associated British Foods (ABF) 2,983.00p +1.77%easyJet (EZJ) 1,597.00p +1.66%HSBC Holdings (HSBA) 568.30p +1.63%FTSE 100 - FallersNext (NXT) 7,310.00p -2.27%Schroders (SDR) 2,963.00p -1.00%Sainsbury (J) (SBRY) 252.20p -0.90%Morrison (Wm) Supermarkets (MRW) 166.30p -0.66%Capita (CPI) 1,256.00p -0.32%AstraZeneca (AZN) 4,189.00p -0.13%InterContinental Hotels Group (IHG) 2,575.00p -0.08%Sports Direct International (SPD) 708.50p -0.07%Rolls-Royce Holdings (RR.) 758.00p -0.07%Royal Dutch Shell 'A' (RDSA) 1,800.50p -0.06%FTSE 250 - RisersFidelity China Special Situations (FCSS) 129.80p +6.05%Drax Group (DRX) 267.80p +5.18%Supergroup (SGP) 1,296.00p +4.43%Kaz Minerals (KAZ) 188.70p +3.45%PayPoint (PAY) 1,008.00p +3.38%Premier Oil (PMO) 140.40p +2.63%CLS Holdings (CLI) 1,850.00p +2.49%Polymetal International (POLY) 499.60p +2.48%BTG (BTG) 668.00p +2.38%Man Group (EMG) 143.00p +2.29%FTSE 250 - FallersVedanta Resources (VED) 447.60p -4.87%Nostrum Oil & Gas (NOG) 586.50p -2.90%Debenhams (DEB) 85.45p -2.79%Grafton Group Units (GFTU) 747.50p -2.54%Wetherspoon (J.D.) (JDW) 753.00p -2.21%Balfour Beatty (BBY) 223.50p -2.15%TalkTalk Telecom Group (TALK) 365.50p -1.96%Mitchells & Butlers (MAB) 449.00p -1.79%Shawbrook Group (SHAW) 321.60p -1.47%Morgan Advanced Materials (MGAM) 313.50p -1.35%