London close: Investors cheer Chinese economic data

(Sharecast News) - London stocks ticked higher on Monday as investors mulled mixed Chinese economic data and the start of the US second quarter earnings season as banking giant delivered a solid score card for the three months to June.
The FTSE 100 was up 0.34% at 7,531.72, while the pound was down 0.39% against the US dollar at 1.2522 and 0.32% weaker versus the euro at 1.1120.

Stocks on the FTSE 250 index were also higher with the second-tier index adding 0.17% to 19,584.14.

Data released earlier by China's statistics bureau showed that economic growth there eased to its weakest pace in 27 years in the second quarter. In the three months to June, gross domestic product rose 6.2%, down from 6.4% growth in the first three months of the year but in line with economists' forecasts as the trade war with the US rumbles on.

There was some good news, however, with industrial production 6.3% higher in June compared to a year earlier, up from 5% growth the month before, while retail sales rose 9.8% year-on-year compared to 8.6% growth in May - both ahead of expectations. Economists had been expecting growth of 5.2% and 8.3%, respectively.

Fixed asset investment for June came in at 5.8% growth versus 5.6% the previous month and ahead of economists' expectations of 5.5% growth.

As far as the GDP figures are concerned, Neil Wilson, chief market analyst at Markets.com, said "bad news = good news", with the market now "baying for more stimulus".

Geopolitical tensions were in focus after France, Germany and the UK called on Iran to "act responsibly" and fully comply with commitments made in a 2015 international nuclear agreement.

Market participants were also eyeing the start of the US earnings season, with Citigroup publishing diluted earnings per share came of $1.95, compared to $1.63 a year earlier. Excluding the gain made from Tradeweb's initial public offering in April, EPS increased 12% to $1.83. Most analysts had been looking for EPS of around $1.80.

Financial sector heavyweights JPMorgan and Goldman Sachs were due to publish results the next day, followed by Bank of America-Merrill Lynch later in the week.

In UK equity markets, Antofagasta pushed higher after a World Bank arbitration court ordered the Pakistani government pay damages of $5.8bn to Tethyan Copper, which is a joint venture between Antofagasta and Canada's Barrick Gold.

On the downside, Sports Direct shares slumped after the retailer said it was delaying the publication of its preliminary results as it pointed to the "complexities" of integrating House of Fraser and warned that the guidance given back in December could be "materially" affected. The company also cited "increased regulatory scrutiny" of auditors and audits including the FRC review of Grant Thornton's audit of its financial statements for the period to 29 April 2018.

But Russ Mould, investment director at AJ Bell, said the delay may not necessarily be bad news.

"There has been a growing trend this year for auditors to take longer to sign off the accounts, principally because they are under increasing pressure to make sure they don't miss any nasty items and to ensure the audit is done properly," he said. "It stems from a succession of companies revealing major accounting flaws in recent years with auditors having initially failed to spot the issues. BHS and Patisserie are two examples where problems were originally missed."

Insurers such as Admiral, Hastings and Direct Line were in focus after the Ministry of Justice said it was changing the Ogden discount rate used to calculate compensation for personal injuries to -0.25% from -0.75%.

The discount rate reflects the return that personal injury claimants can typically expect to receive when they invest their compensation, with a lower rate leading to higher insurance costs. The industry had been expecting a bigger reduction.

Micro Focus slumped as it emerged that chairman Kevin Loosemore sold 650,000 shares in the business last week. Loosemore sold 214,658 shares in the software company last Wednesday at 1,861p peach. The day after, he sold a further 435,342 shares at 1,736p each.

In broker note action, Cairn Energy was hit by a downgrade to 'underperform' at Jefferies.

Market Movers

FTSE 100 (UKX) 7,531.72 0.34%
FTSE 250 (MCX) 19,584.14 0.17%
techMARK (TASX) 3,675.69 0.37%

FTSE 100 - Risers

Just Eat (JE.) 638.20p 4.28%
Flutter Entertainment (FLTR) 7,014.35p 4.22%
Antofagasta (ANTO) 897.60p 4.01%
Evraz (EVR) 633.40p 2.46%
Mondi (MNDI) 1,814.50p 2.28%
NMC Health (NMC) 2,275.00p 2.25%
Fresnillo (FRES) 897.40p 2.05%
Experian (EXPN) 2,418.00p 1.81%
Smurfit Kappa Group (SKG) 2,656.00p 1.76%
Rentokil Initial (RTO) 417.70p 1.73%

FTSE 100 - Fallers

Micro Focus International (MCRO) 1,664.00p -5.66%
Persimmon (PSN) 1,932.00p -2.89%
Vodafone Group (VOD) 130.20p -1.17%
United Utilities Group (UU.) 768.80p -1.16%
ITV (ITV) 109.90p -1.12%
BT Group (BT.A) 190.00p -1.07%
Severn Trent (SVT) 2,025.00p -0.98%
Tesco (TSCO) 240.20p -0.78%
Burberry Group (BRBY) 1,990.50p -0.72%
BP (BP.) 542.10p -0.71%

FTSE 250 - Risers

Amigo Holdings (AMGO) 181.60p 4.37%
IP Group (IPO) 73.00p 4.14%
Rank Group (RNK) 158.20p 2.73%
Kaz Minerals (KAZ) 544.00p 2.64%
Hill & Smith Holdings (HILS) 1,155.00p 2.39%
B&M European Value Retail S.A. (DI) (BME) 350.70p 2.36%
CYBG (CYBG) 203.60p 2.36%
EI Group (EIG) 202.00p 2.23%
Greene King (GNK) 640.60p 2.07%
AJ Bell (AJB) 421.00p 1.94%

FTSE 250 - Fallers

Sports Direct International (SPD) 238.20p -9.57%
CLS Holdings (CLI) 220.00p -3.51%
TalkTalk Telecom Group (TALK) 104.50p -3.42%
Balfour Beatty (BBY) 232.40p -2.68%
Cairn Energy (CNE) 173.10p -2.59%
Syncona Limited NPV (SYNC) 232.50p -2.52%
Workspace Group (WKP) 879.00p -2.22%
NewRiver REIT (NRR) 167.20p -2.22%
Premier Oil (PMO) 79.68p -2.14%
Contour Global (GLO) 172.60p -2.02%