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LONDON (Alliance News) - Better-than-expected data from China were giving support to London stocks Wednesday midday, with US stocks also called for a positive open, while US crude oil stocks data will be in focus this afternoon as oil prices recover from the lows seen on Tuesday.

The FTSE 100 index was up 1.0% at 5,986.86 points, the FTSE 250 up 0.5% at 16,768.38 and the AIM All-Share up 0.2% at 722.07. In Europe, the French CAC 40 was up 1.4% and the German DAX 30 up 1.0%.

Chinese economic data provided a positive surprise for the market, declining by much less than expected. The country's trade surplus increased in December, as exports dropped at a slower-than-expected pace, raising hopes that the depreciation in yuan is unlikely to continue on its previous trajectory.

Exports fell 1.4% on a yearly basis in December, data published by the General Administration of Customs revealed Wednesday. It was slower than an 8% decline expected by economists and a 6.8% decrease posted in November. At the same time, imports slid 7.6%, also slower than the expected decrease of 11%.

The Chinese trade surplus rose to around USD60 billion, taking the full-year surplus to USD594.5 billion. The December figure was well above a USD51.3 billion surplus forecast by economists.

In yuan terms, exports advanced 2.3%, reversing a 3.7% drop in November. Imports slid at a slower pace of 4% after falling 5.6% a month ago.

"The divergence between Chinese markets and economic data has seen investors struggling to decipher the confusing picture coming out of Asia. The [Chinese market] might still be suffering from volatility, but European traders have decided to focus on the improving Chinese trade balance," said IG market analyst Alastair McCaig.

Despite the better-than-expected data, stocks in Asia closed mixed. The Shanghai Composite index closed down 2.4%. However, the Nikkei 225 index in Tokyo finished up 2.9%, and the Hang Seng in Hong Kong up 1.1%.

In London, the positive Chinese trade figures saw miners in the FTSE 100 trade among the best performers with Rio Tinto up 4.2%, Glencore up 2.9% and Antofagasta up 1.8%.

Investors in New York also were expected to be cheered the data out of China, with US futures pointing higher. The Dow Jones Industrials was called up 0.5%, the S&P 500 up 0.6% and the Nasdaq 100 up 0.7%.

Still in the US economic calendar, US MBA mortgage applications are due at 1200 GMT. The US monthly budget statement is after the London close at 1900 GMT. But before that, the US Energy Information Administration's releases its crude oil stocks at 1530 GMT.

The EIA data comes after the West Texas Intermediate touched overnight a new record low of USD29.93 a barrel, a level not seen since December 2003. However, WTI has recovered some ground since, quoted at USD31.10 a barrel Wednesday midday.

Similarly, the Brent oil price was off its Tuesday lows, when it touched USD30.36 a barrel, quoted at midday at USD31.48 a barrel.

Oil-related companies were benefiting from the rise in crude prices, with BP up 3.5%, Royal Dutch Shell 'B' up 2.7% and BG Group up 2.6%. Mid-caps Ophir Energy and Cairn Energy were up 2.4% and 1.3%, respectively.

Tullow Oil was the best performer in the FTSE 250, up 9.4%, despite the oil and gas producer saying revenue and gross profit is set to come in considerably lower in 2015 than a year earlier as lower oil prices and lower production from Europe offset a small rise in production from Tullow's main asset in West Africa.

The company also provided an update on the TEN project in Ghana, which is now 80% complete and on track to begin producing oil between July and August this year. That will help Tullow push production up to around 73,000 to 80,000 barrels per day in 2016. European production is expected to be in the range of 5,000 to 7,000 barrels a day this year.

Elsewhere on the London Stock Exchange it was all about retailers.

Sports Direct International was up 4.2%. The sports clothing and equipment retailer said it holds an indirect interest representing 11.5% of the issued share capital of Iconix Brand Group and 2.3% of the issued share capital of Dick's Sporting Goods.

Iconix is a brand management company which owns a portfolio of consumer brands across fashion, sports, entertainment and home. Dick's is a sporting goods and sports clothing retailer.

Shares in Sports Direct were still down 18% since Friday last week, following the profit warning in which the company said it had been hit by deteriorating conditions on the UK high street and the effect of the mild winter weather, leaving the stock in danger of demotion from the FTSE 100.

At the other end of the index was J Sainbury. The grocer reported growth in total retail sales excluding fuel in its third quarter as the number of customer transactions rose, although like-for-like sales fell. Sainsbury's said total retail sales in the 15 weeks ended January 9 grew 0.8% excluding fuel, although they fell 0.7% including fuel.

Like-for-like retail sales, meanwhile, declined 0.4% excluding fuel and 1.8% including fuel. Sainsbury's added that over 30 million customer transactions were made in the week before Christmas, which was up 2.6% year-on-year.

Cantor Fitzgerald analyst Mike Dennis said the like-for-like performance excluding fuel came in ahead of the market consensus of a 0.7% decline and Cantor's own forecast of a 1.5% fall.

Shares in Sainsbury's were down 1.0%. However, the stock had gained 3.2% on Tuesday, after topping the Kantar Worldpanel UK grocery market survey.

Mid-cap Ted Baker was up 3.7% after the fashion retailer reported a rise in retail sales in its eight-week Christmas period and said it expects full-year results to be in line with its expectations.

It said retail sales in the eight weeks to January 9 grew 10% year-on-year. Gross margins were in line with expectations, and there was no significant promotional activity before Christmas, Ted Baker said, adding that it expects to end the year with a clean stock position.

Dunelm Group was down 4.1%, the worst FTSE 250 performer, after the homewares retailer reported growth in sales in the first half of its financial year as it benefited from an extra six days in its winter sale, but warned the positive like-for-like trend would reverse in the current quarter.

Dunelm said total sales in the 26 weeks ended January 2 grew 10% to GBP448.1 million year-on-year, growing 8.8% to GBP245.7 million in the 13 weeks to the same date. Like-for-like sales rose 4.6% to GBP404.9 million in the 26 weeks and 3.9% to GBP221.5 million in the 13-week period.

On AIM, Shoe Zone was up 14%. The value shoe retailer reported a fall in pretax profit in its recently-ended financial year, as revenue declined in what it described as a difficult year for the footwear industry. The company said its pretax profit in the year ended October 3 fell 3.4% to GBP10.1 million from GBP10.5 million the year before, as revenue declined 3.5% to GBP166.8 million from GBP172.9 million.

By Daniel Ruiz; danielruiz@alliancenews.com

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