Barclays Share News (BARC)

LONDON (Alliance News) - UK equities are bouncing Thursday following three consecutive days of losses, after a strong session in Asian stock markets which was spurred by better-than-expected Chinese bank lending data.

China's bank lending increased by more than expected in September, data from the People's Bank of China revealed Thursday. Banks extended CNY1.05 trillion loans in September, coming ahead of economist forecasts of rise to CNY900 billion from CNY809.6 billion in August.

Similarly, total social financing, a broad measure of liquidity in the economy, rose to CNY1.3 trillion from CNY1.08 trillion in prior month. It was also above the expected level of CNY1.2 trillion.

David Madden, market analyst at IG said that the better-than-expected loans data was a welcome release and showed some signs that the slowdown in the country was easing.

"The Beijing banks have come under pressure recently as bad debts are being racked up, but a ramp up in the money supply has lifted spirits for now. Stocks in the commodity space have benefited the most from the Chinese lending figures, but traders still don't fully trust the mining sector, and the rally will be difficult to sustain," Madden said.

Mining stocks were trading broadly higher, with Glencore up 2.9% and Antofagasta up 1.7%.

Asian equities posted a strong performance, with the Nikkei 225 index in Tokyo closing up 1.2%, the Hang Seng in Hong Kong up 2.0% and the Shanghai Composite index up 2.3%.

At midday, the FTSE 100 traded up 1.1% at 6,335.51, the FTSE 250 was up 0.6% at 16,917.72 and the AIM All-Share index was up 0.4% at 735.11. European stocks also were trading higher, with the CAC 40 index in Paris up 1.4% and the DAX 30 in Frankfurt up 1.6%.

In New York, futures pointed Wall Street to a higher open with the Dow 30 seen up 0.7%, the S&P 500 indicated up 0.7% as well, and the Nasdaq 100 up 0.9%. In the US corporate calendar, banking groups Citigroup, Goldman Sachs Group and US Bancorp are scheduled to report earnings. There are also releases from UnitedHealth Group and tobacco company Phillip Morris International.

Netflix shares were down 4.3% premarket after the online-video streaming company on Wednesday said third-quarter profit halved from last year, hurt largely by higher operating costs, as revenue increased. The company's earnings and revenues missed Wall Street estimates and it reported a disappointing US subscriber growth.

In London, Burberry Group was by far the biggest faller in the FTSE 100, down 12%. The luxury fashion retailer said its second quarter was hit by a challenging environment for the luxury goods industry, particularly in China, and said it will take further cost-control actions in the second half to minimise the impact on its profit for the full year.

Nevertheless, the group said it expects its adjusted pretax profit for the full year to be in line with analyst expectations, despite the tough environment.

"The external environment became more challenging during the half, affecting luxury consumer demand in some of our key markets. In response, we have intensified our focus on driving sales and productivity, while taking swift action on discretionary costs," said Chief Executive Christopher Bailey.

Meanwhile, Unilever shares were amongst the top gainers in the blue-chip index, up 4.2%. The consumer goods giant reported a rise in sales in the third quarter of 2015 and said it expects underlying sales to grow at the upper end of its guided range for the full year.

The group said revenue in the third quarter of the year grew 9.4% to EUR13.4 billion, while rising 11% to EUR40.4 billion in the first nine months of the year. Growth was helped by soft comparatives in China, strong ice cream sales, and price increases in Latin America. The company added however, that consumer demand remained fragile, while volume growth was "barely positive" in the markets in which it operates.

Keith Bowman, an equity analyst at Hargreaves Lansdown Stockbrokers, said that Unilever appears to be largely back on track, and investors will be breathing a sigh of relief.

"Despite current headwinds, the group's push towards the emerging markets is taking the long-term view, whilst management's drive to increase product innovation continues to be verified," the analyst said. "For now, while challenges clearly remain, prior investor confidence in the group's outlook is being slowly restored."

Elsewhere, the Bank of England said that the largest six UK banks may need to bolster their capital levels under incoming ring-fencing rules that require the separation of retail operations from investment banking activities.

The ring-fencing rules could mean that banks with more than GBP25 billion in core deposits - money held for from individuals and small businesses - could be faced with additional capital requirements of up to GBP3.3 billion in total, the Bank of England's Prudential Regulation Authority said.

Barclays, up 0.6%, HSBC Holdings, up 0.1%, Lloyds Banking Group, up 0.7% and Royal Bank of Scotland Group, up 1.2%, are the London-listed banking groups likely to be affected by the rules.

In the FTSE 250, WH Smith was the best performer up 6.6%. The newsagent announced a share buyback as it reported a rise in pretax profit in its recently-ended financial year, boosted by strong sales in its travel division, and it said its struggling high street business also picked up in the second half.

WH Smith reported an 8% rise in pretax profit in the year ended August 31 to GBP121 million from GBP112 million the year before.

It also said it will buy back shares in the company of up to GBP50 million, following the completion of a share buyback for the same amount which it announced in October last year. It also will pay a total dividend of 39.4 pence for the year, a 13% increase on the 35.0p it paid the prior year.

Hedge fund manager Man Group was up 4.2% after it said it had USD1.4 billion of net inflows in the third quarter, driven by flows into its quant strategies, although overall funds under management fell due to negative investment movements of USD2.7 billion and a USD600,000 hit from the strength of the US dollar.

The quarter coincided with tough conditions towards the end of August, with market volatility up due to fears about China's economy and concerns about a looming US interest rate rise and its likely effect on emerging markets.

"Despite the extreme market movements in late August impacting absolute performance across our long-only strategies, we have seen good relative performance across the majority of our strategies for the year to date," Chief Executive Manny Roman said.

Carclo was the worst performer in the FTSE AllShare, down 15% after the plastics company said it has traded ahead year-on-year in the first half of its financial year, but a recent announcement from Volkswagen will likely mean its results will miss market expectations.

Carclo said the announcement from VW that its flagship luxury vehicle due for launch in 2017 will not be launched as a fully-electric vehicle is still being assessed in terms of the effect this will have on the lighting requirement, but will almost certainly mean the launch of the vehicle will be delayed, hitting the timing of revenue for Carclo's Wipac unit in its LED Technologies division.

Alpha Pyrenees Trust's share price more than doubled after it said it has signed an agreement with Barclays Bank to extend its debt facilities to April 2016. Alpha said its board has agreed an extension to its facilities with Barclays and the maturity on its EUR257.8 million in debt has been extended to April 15, 2016. Barclays is supporting the orderly realisation of the company's investment property, Alpha Pyrenees said.

In the economic calendar, US consumer price index and initial and continuing jobless claims are both expected at 1330 BST. A weak inflation reading is likely to see expectations of a US Federal Reserve interest rate hike pushed further back, after worse-than-expected US retail sales on Wednesday. CPI is expected to decline 0.1% year-on-year in September, compared to a 0.2% rise in August.

The Philadelphia Federal Reserve manufacturing survey is due at 1500 BST, while EIA crude oil stocks are due at 1530 BST.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

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