(Alliance News) - Stocks in London got off to a positive start on Friday following upbeat industrial production in China.
The better-than-expected Chinese data out-shined for investors US President Donald Trump's threat to end the trade agreement between the world's two largest economies.
Trump on Thursday said he does not want to talk to his Chinese counterpart, amid rising tensions about the coronavirus pandemic.
Speaking in an interview with Fox Business Network, Trump said he had a "very good relationship" with Chinese President Xi Jinping, but "right now, I don't want to speak to him".
"There are many things we could do," Trump said. "We could cut off the whole relationship."
The FTSE 100 index was up 69.79 points, or 1.2%, at 5,811.33 early Friday. The mid-cap FTSE 250 index was up 147.68 points, or 1.0%, at 15,552.27. The AIM All-Share index was up 0.6% at 805.78.
The Cboe UK 100 index was up 1.3% at 9,820.75. The Cboe 250 was up 0.8% at 13,169.73, and the Cboe Small Companies up 0.3% at 8,731.65.
In mainland Europe, the CAC 40 in Paris was up 1.1% and DAX 30 in Frankfurt was 1.3% higher early Friday.
"After two downbeat sessions investors are once again in a buying mood showing immunity to a whole host of reasons to remain bearish, not least to mention 36 million Americans filing for jobless claims in just 2 months," City Index's Fiona Cincotta said.
She continued: "Following on from a higher close on Wall Street, European bourses are pointing to a stronger start as investors brush off rising US-Sino geopolitical tensions instead focusing on the bright spots in mixed Chinese data which provided further insight into the post-lockdown economic recovery."
In New York on Thursday, Wall Street ended in the green. The Dow Jones Industrial Average ended 1.6% higher, the S&P 500 1.2%, and the Nasdaq Composite 0.9%.
In Asia on Friday, the Japanese Nikkei 225 index closed up 0.6%. In China, the Shanghai Composite closed down 0.1%, while the Hang Seng index in Hong Kong was down 0.1% in late trade.
China's industrial output returned to growth for the first time this year in April, official data showed, as the country continued its gradual recovery after the coronavirus brought activity to a near-halt.
Industrial production grew a more-than-expected 3.9% year-on-year last month in a sign that China – where the pathogen first emerged – is recovering from tough lockdown measures now seen in other parts of the world.
A Bloomberg poll of analysts had forecast growth of 1.5%.
Industrial production growth last month was better than the 1.1% contraction in March and 14% collapse in the first two months of 2020 as well – the first time industrial output shrank in three decades as the virus ravaged the economy.
But retail sales remained in contraction territory, National Bureau of Statistics data showed, signalling that consumer demand is still weak despite China's initial success in containing the outbreak.
Retail sales were down 7.5% from a year ago, an improvement from a 16% plunge in March.
"What we can take away from the Chinese data and apply to other economies is that improvements in economic activity will be gradual," Cincotta added.
Sterling was quoted at USD1.2207 early Friday, down slightly from USD1.2210 at the London equities close on Thursday.
The euro traded at USD1.0807, flat from USD1.0808 late Thursday. Against the yen, the dollar was quoted at JPY107.15, up from JPY107.05.
In London, BT Group rose to the top of the blue-chip index, gaining 8.0%, after it emerged on Thursday the telecommunications firm is in talks to sell a multibillion pound stake in its Openreach digital network business to infrastructure investor.
Three people with direct knowledge of the discussions told the Financial Times that potential buyers, including Australian bank Macquarie Group and a sovereign wealth fund, have held talks with BT in the past three weeks.
Openreach, which maintains the UK's national network, is the most profitable division within BT and the potential stake sale could value the unit at about GBP20 billion, sources told the newspaper. BT itself has a market capitalisation of just half that.
Elsewhere, Computacenter raced to the top of London mid-caps, rising 12%, after saying its trading in the period from mid-April to mid-May has "accelerated", and has struck some "substantial" Technology Sourcing contracts.
"These incremental volumes mean that we now believe that the first half of 2020 will be considerably ahead of the same period of last year," Computacenter added.
William Hill was up 5.6% despite trading in the 17 weeks to April 28 taking a serious hit from the Covid-19 pandemic.
But the bookmaker said it is planning a phased reopening of its stores in the second half of 2020.
In the meantime, its customers have been betting on "table tennis and emerging market football", keeping its online sports wagering business in better shape than William Hill first feared.
For the period, total net revenue plunged 27%, with net gaming revenue down 27% and sportbook wagers falling 31%.
In the 10 weeks to March 31 - before national lockdowns in the UK and US came into effect - William Hill's total net revenue slipped 5%, due to a 24% drop in net gaming revenue.
In the period from March 11 to April 28 - during which the firm has had to close its high street stores - total net revenue cratered 58%. Net gaming revenue was down 33% and sportsbooks wagers fell 70%.
In response to this, William Hill looked to cut its cash costs, reducing its monthly cash outflow to GBP15 million and has agreed a covenant waiver until 2021.
The bookmaker said: "We conclude the period in a strong financial position with significant headroom. The outstanding amount on the 2020 bond of GBP203 million is scheduled for repayment in June and we have ensured that capital expenditure related to growth opportunities has been preserved, enabling us to press ahead with our plans to grow the US business and continue to develop our product."
National Express gained 5.4% as it was able to generate positive Ebitda "slightly ahead" of internal expectations.
Its revenue for April, however, has been halved from the year before.
National Express noted it has started selling coach tickets for a "core network" in the UK for a July 1 re-opening.
Gold was quoted at USD1,736.60 an ounce early Friday, up on USD1,730.24 on Thursday. Brent oil was trading at USD32.21 a barrel early Friday, higher against USD30.12 late Thursday.
Still to come, there is the awaited eurozone gross domestic product print at 1000 BST and US retail sales figures at 1330 BST.
By Paul McGowan; paulmcgowan@alliancenews.com
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