LONDON (Alliance News) - UK stocks are trading higher Monday, shrugging off steep losses recorded by Asian exchanges earlier, amid a dearth of fresh UK macro-economic data releases.
London's major equity indices opened fractionally lower Monday, having dropped sharply on Friday, before quickly rallying back into the black. By mid-morning, the FTSE 100 is up 0.4% at 6,736.33, the FTSE 250 is up 0.2% at 16,597.9, and the AIM All-Share index is up 0.2% at 897.43.
"You might have expected more of a negative reaction from European markets this morning given the weekend?s events, but equities remain defiant despite rising concerns in both China and the Ukraine," says Toby Morris, senior sales trader at CMC Markets.
While Chinese imports grew by 10% in February, exports declined unexpectedly, dropping by 18%. The data meant that China's trade balance showed a deficit of USD22.98 billion compared to the surplus of USD31.86 billion seen in January, and came in well short of the USD14.50 billion surplus that had been expected.
As a result, the Shanghai Composite index closed down 2.9% and the Hang Seng closed down 1.8%. The Nikkei 225 in Tokyo also closed lower, down 1%, weighed upon also by the downward revision of Japanese gross domestic product.
Japan's economy grew at an annual rate of 0.7% in the October-December period, revised down from an initial estimate of 1%.
"As for the Ukraine situation, that has done little to lend a hand to the markets, with a string of nations including Germany condemning Russia?s 'illegal' plans to conduct a Crimean referendum on their future," says Morris.
While another few days without an escalation of violence should be regarded as a positive, the political and economic side effects get more complicated every day, he adds.
The weaker-than-expected Chinese trade data has, unsurprisingly, put pressure on the mining sector Monday. Antofagasta, Glencore Xstrata, BHP Billiton, Anglo American, and Rio Tinto, are all amongst the top ten fallers in the blue-chip index, down 2.1%, 1.6%, 1%, 0.9 and 0.7%, respectively. FTSE 250-listed Kazakhmys, down 1%, and Polymetal International, down 1%, are amongst the biggest losers in their respective index.
The FTSE 350 mining sector itself is down 1%.
Senior PLC, is the FTSE 250's biggest riser, up 4.9%, after it announced the proposed acquisition of UPECA Technologies, a Malaysian-based manufacturer of high-precision engineered components serving the aerospace and energy sectors, for GBP75.5 million.
AIM All-Share-listed Fyffes is up 25%. Chiquita Brands International and Fyffes have reached a deal whereby Chiquita will acquire Fyffes to create the world's largest banana company.
Chiquita and Fyffes, which will also have big market share in packaged salads, melons and pineapples, said they expect the deal to result in annual overheads and operational cost synergies of at least USD40 million by the end of 2016. The synergies will mainly come from combining logistics and procurement operations.
In the forex market, the euro was little changed in the aftermath of the Sentix investor confidence index. The index showed that investor confidence in the bloc reached its highest level since April 2011, rising to 13.9 in March, up from 13.3 in February. Economists had been expecting the index to come in slightly higher at 14.0.
The pound, however, has slipped to 1.4627 against the Swiss franc, its lowest level since December. It has also dropped to multi-day lows against the dollar and the euro, currently trading at CHF1.4627, USD1.6655, and EUR1.2001.
Still to come in the data calendar, Federal Reserve Bank of Philadelphia president Charles Plosser gives a speech at 1115 GMT. Charles Bean, deputy governor of the Bank of England, gives a speech at 1415 GMT.
By James Kemp; jameskemp@alliancenews.com; @jamespkemp
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