London open: Stocks gain as Chinese growth accelerates in Q4

18th Jan 2013 08:19

The FTSE 100 was making small gains in early trading on Friday with mining stocks providing a lift after some better-than-expected growth figures from China.China's economic growth seems to have accelerated for the first time in two years towards the end of 2012 thanks to the stimulus measures implemented by the government. Chinese gross domestic product expanded at a 7.9% year-on-year pace in the last three months of 2012, ahead of the 7.8% expected by the consensus. "Nevertheless, as always, policy officials were quick to point out that the threat of a slowdown with China is still a real possibility owing to a potential slowdown in global growth," said financial trader Shavaz Dhalla from Spreadex."Thus, before investors get too carried away with the positive data from China, it may be wise to consider that the next tranche of growth data from China may not be as positive as the fourth quarter 2012 growth figures."Dhalla added that with Morgan Stanley due to report its fourth-quarter figures later, "financial shares could be vulnerable to seesaw type movements today" following on from the mixed results from other banking heavyweights seen earlier in the week. Both Goldman Sachs and JPMorgan smashed expectations on Wednesday, while Bank of America and Citigroup disappointed markets yesterday.FTSE 100: Miners boosted by Chinese dataMining peers Rio Tinto, ENRC and EVRAZ were slightly higher this morning as the demand outlook brightened following the Chinese GDP figures. The latter was making gains even though it said that steel production fell 6% from the third quarter to the fourth, as a result of scheduled maintenance at its ZSMK steel mill in the Siberia region.The stock was being given a lift this morning by comments from Credit Suisse this morning about the steel sector. The broker said: "The cycle is now recovering. Confidence appears to be returning as the recovery in the financial equities suggested to us could be the case. Anecdotes we hear suggest that the demand outlook (non-res in the US, general demand in EU) could be better than the market believes."Rio was rebounding from suffering losses yesterday after announcing that its Chief Executive Officer had resigned following a non-cash impairment charge of approximately $14bn in its 2012 full-year results. Analyst James Gurry from Credit Suisse said this morning: "After the market digests this news we think the focus should remain on iron ore prices, project delivery and the larger macro picture, all which remains unchanged following yesterday's announcement especially given current head of iron ore (80% of earnings / 65% NPV) takes over as CEO, share price pressure should be seen as buying opportunity."However, Glencore and Xstrata were trading slightly lower after saying that they are to extend the long-stop date for their merger from the end of this month to March 15th.Aerospace components engineer Meggitt was a high riser this morning after Barclays Capital upgraded its rating for the stock from 'equal weight' to 'overweight' and raised its target price from 450p to 520p. The broker said that the shares' 20% valuation discount to peers "will close as investors in the aerospace cycle look away from the more expensive pure-play names with original equipment or aftermarket exposure, and seek sector laggards like Meggitt".FTSE 100 - RisersMeggitt (MGGT) 438.70p +1.79%Rio Tinto (RIO) 3,488.00p +1.41%ARM Holdings (ARM) 867.50p +1.40%Associated British Foods (ABF) 1,627.00p +1.31%Evraz (EVR) 295.20p +1.30%CRH (CRH) 1,253.00p +1.13%Aberdeen Asset Management (ADN) 389.30p +1.12%Kazakhmys (KAZ) 784.50p +1.10%Pearson (PSON) 1,244.00p +0.97%AstraZeneca (AZN) 3,099.50p +0.94%FTSE 100 - FallersRexam (REX) 459.20p -1.31%Experian (EXPN) 1,073.00p -1.20%Wolseley (WOS) 2,961.00p -1.10%Kingfisher (KGF) 282.90p -0.77%Sainsbury (J) (SBRY) 325.60p -0.73%Aggreko (AGK) 1,807.00p -0.61%BAE Systems (BA.) 342.90p -0.49%Prudential (PRU) 928.50p -0.43%Admiral Group (ADM) 1,164.00p -0.43%Royal Bank of Scotland Group (RBS) 352.30p -0.42%FTSE 250 - RisersSpectris (SXS) 2,091.00p +3.36%New World Resources A Shares (NWR) 303.76p +3.14%Ophir Energy (OPHR) 543.00p +3.04%Kentz Corporation Ltd. (KENZ) 400.00p +2.83%Centamin (DI) (CEY) 56.50p +2.26%Senior (SNR) 209.00p +2.25%Morgan Crucible Co (MGCR) 278.70p +2.13%Jardine Lloyd Thompson Group (JLT) 787.50p +1.61%Moneysupermarket.com Group (MONY) 183.00p +1.55%UBM (UBM) 729.00p +1.53%FTSE 250 - FallersAshmore Group (ASHM) 358.20p -1.73%PayPoint (PAY) 858.58p -1.71%COLT Group SA (COLT) 102.42p -1.33%Dixons Retail (DXNS) 26.95p -1.10%Home Retail Group (HOME) 135.10p -1.10%Mondi (MNDI) 714.00p -1.04%RPS Group (RPS) 230.10p -1.03%Vesuvius (VSVS) 362.90p -1.01%Renishaw (RSW) 1,811.00p -0.98%Kier Group (KIE) 1,359.00p -0.95%BC