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LONDON (Alliance News) - Shares in London were higher Wednesday midday, with miners and other stocks with exposure to China leading the way after the report of a surge in Chinese exports, while oil prices retained gains made on Tuesday after reports of a deal between Russia and Saudi Arabia to freeze output.

Bucking the positive trend, supermarket chain Tesco was the biggest decliner in the FTSE 100, down 5.7%, the worst performer among a dozen or so falling stocks in a rising market.

The UK's biggest retailer said it made a pretax profit in the year ended February 27 of GBP162.0 million, having suffered a GBP6.33 billion pretax loss the year before, when it booked a staggering GBP6.69 billion of impairments, writedowns and restructuring charges after admitting it had overstated profits in recent years by booking revenue too early.

These charges did not repeat in financial 2016, helping Tesco to return to profit once again, but the GBP162.0 million statutory pretax figure was considerably below the analyst consensus estimate of GBP447.0 million. Group operating profit before exceptional items, however, grew to GBP944.0 million from GBP940.0 million, beating the analyst consensus figure of GBP932.0 million.

Revenue slipped to GBP54.43 billion from GBP56.93 billion, and while it was expected to fall, the final figure was slightly lower than the GBP55.32 billion analyst consensus estimate.

The FTSE 100 index was up 1.4%, or 88.54 points, at 6,330.93, having reached its highest level so far in 2016 at 6,341.78. The FTSE 250 index was up 1.2% at 16,988.11 and the AIM All-Share up 0.5% at 728.19.

Shares in miners and other companies with exposure to China were surging after data from China's General Administration of Customs showed the Asian giant's exports climbed at the fastest pace in a year in March, while imports declined at a slower pace, suggesting that its economy is gaining momentum at the end of first quarter.

Exports grew 11.5% year-over-year in March, exceeding economists' expectations for a 10.0% rise and reversing February's 25.4% decline. Exports benefited from a lower base comparison caused by the Lunar New Year holidays. At the same time, imports dropped 7.6% in March from a year ago, slower than the 10.1% decrease expected by economists and a 13.8% fall seen in February.

The trade surplus came in at USD29.9 billion in March, which was below the expected surplus of USD34.95 billion.

Asian stocks ended higher, with the Nikkei 225 index in Tokyo up 2.8%, the Shanghai Composite up 1.4% and the Hang Seng in Hong Kong up 3.2%.

In London, Standard Chartered was up 8.8%, whilst Burberry Group was adding 2.9%. Miner Anglo American was up 6.1%, BHP Billiton up 5.7%, Rio Tinto up 4.2% and Glencore up 3.4%. In the FTSE 250, Evraz was up 9.0% and KAZ Minerals up 3.3%.

"There is a clear flock for the riskier assets, with mining and oil producers leading the FTSE 100 higher amid a renewed confidence in the sector as it becomes increasingly apparent the worst could be over for commodities," said IG analyst Joshua Mahony.

Mahony noted that, "for the commodities rout to be over, a resurgent China is required, and the impressive trade data released overnight provided exactly the assurance we were looking for."

Shares in BP were up 2.6%, while Royal Dutch Shell 'A' shares were adding 0.9% to around their highest level so far in 2016. Mid-cap oil company Tullow Oil was up 8.6%.

Oil producers were benefiting from a rise in crude prices on Tuesday following a report from Russian news agency Interfax that Russia and Saudi Arabia reached a consensus on freezing oil output. Interfax cited a diplomatic source in Doha ahead of a meeting of oil producers in capital of Qatar on Sunday.

Brent spiked to a four-month high Tuesday at USD44.78 a barrel following the report, standing at the close at USD44.29 a barrel. Wednesday midday, the North Sea benchmark was retaining its gains, quoted at USD44.31 a barrel.

Elsewhere on the London Stock Exchange, FTSE 250-listed Halfords Group was up 7.6%, after the car parts and bicycles retailer said the recovery of its bicycles business continued in the fourth quarter, with revenue growth across the business. Total revenue for the 11 weeks to April 1 rose 3.2%, leaving total revenue up 1.7% for the 52 weeks to the same date.

WH Smith was down 2.3% despite the books, stationary and magazines retailer saying its pretax profit grew in the first half of its financial year as a continued strong performance for its travel division pushed revenue higher. WH Smith said pretax profit for the half year to the end of February rose 11% year-on-year to GBP80.0 million from GBP72.0 million.

In the London Main Market, Premier Foods was down 26% at 42.46 pence. US spices and flavourings company McCormick & Co said it has decided not to make an offer for the UK food company after deciding it would not be able to make a bid which would secure approval from the Premier Foods board.

McCormick had tabled a 65.00p per share offer for Premier Foods at the end of March after the London-listed company had rejected two other offers. Premier then faced pressure from shareholders to enter into talks with McCormick and relented after the higher offer had been made. Premier said last week the talks with McCormick had been "constructive", but on Wednesday McCormick said it would not be making an offer for Premier.

European stocks were higher, with the CAC 40 in Paris and the DAX 30 in Frankfurt up 2.6% and 2.3%, respectively.

Stocks in New York were expected to track the gains in Europe and Asia, with the Dow 30 and the S&P 500 both seen up 0.5% and the Nasdaq 100 pointed up 0.7%.

As the US earnings season continues, JPMorgan Chase & Co publishes its 2016 first-quarter results before the US equities open.

Later in the day, in the economic calendar, US retail sales and US producer price index are both at 1330 BST, and the Energy Information Administration's crude oil stocks are at 1530 BST.

Already released, the latest Credit Conditions Survey from the Bank of England showed that demand for secured lending for house purchases and the availability of secured credit to households are set to increase in the second quarter.

Lenders said the availability of secured credit to households remained unchanged in three months to mid-March. They expect availability to increase in the second quarter. Meanwhile, the availability of unsecured credit to households increased slightly, and it is forecast to improve further.

A report from Eurostat showed that eurozone industrial production fell 0.8% in February from January, when it grew by a revised 1.9%. Economists had forecast a 0.7% drop. Output for January was revised down from 2.1%. On a yearly basis, industrial output growth eased to 0.8% from revised 2.9% in January. It was slower than the expected 1.2% increase. Nonetheless, production grew for the second straight month.

By Daniel Ruiz; danielruiz@alliancenews.com

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