LONDON MARKET MIDDAY: Miners Rise As China Data Trigger Risk-On Trade

LONDON (Alliance News) - Some positive manufacturing data from China helped to boost global investor sentiment at the start of the week, with London's miners among the gainers on Monday at midday.The FTSE 100 index was up 44.86 points, or 0.6% at 7,324.05 on Monday. The FTSE 250 was up 26.74 points, or 0.1%, at 19,144.22, while the AIM All-Share index was down 0.1% at 916.23.The Cboe UK 100 index was up 0.5% at 12,425.55. The Cboe UK 250 was up 0.2% at 17,159.23, and the Cboe UK Small Companies up 0.1% at 11,189.70."The start of a new quarter, trade optimism and a bounce in Chinese PMI data have conspired to trigger an outbreak of bullish risk sentiment on April Fool's Day," said Kit Juckes at Societe Generale.On Monday, data showed China's manufacturing activity returned to growth in March after four months of contraction. The headline Caixin Purchasing Managers' Index rose to 50.8 points in March from 49.9 in February, marking the first improvement in the health of China's manufacturing sector since November.A reading under 50 indicates contraction in the sector, whereas one above signals expansion.This came after the National Bureau of Statistics at the weekend reported its own manufacturing PMI rose to 50.5 in March from 49.2 in February. There was also upbeat manufacturing data from the UK, as IHS Markit showed Brexit stockpiling boosted the sector to its strongest growth rate in over a year. The headline IHS Markit/CIPS PMI rose to 55.1 in March, from a revised reading of 52.1 in February. February had originally been reported at 52.0. UK companies stepped up production in March to build-up inventories in advance of Brexit, IHS Markit said, and also to meet rising inflows of new work, mainly reflecting stockpiling at clients.The pound was quoted at USD1.3093 at midday following the data, up from USD1.3024 late Friday."One place where spring is yet to turn up, is the Eurozone, however," commented SocGen's Juckes. Manufacturing numbers from mainland Europe released on Monday painted a gloomy picture of the health of the sector. The eurozone manufacturing sector slumped at the sharpest rate in nearly six years in March, IHS Markit showed, with the rate of decline in Germany the worst since the height of the eurozone sovereign debt crisis in 2012. The final eurozone PMI for March registered 47.5, down from February's score of 49.3. The reading was slightly below March's flash reading of 47.6, and marked the lowest score since April 2013.March marked the second successive month that the PMI has come below the 50.0 no-change mark.Within the eurozone, Germany's manufacturing PMI fell to the lowest reading since July 2012 as new orders posted the steepest drop in a decade. The headline IHS Markit/BME Germany Manufacturing PMI tumbled to an 80-month low of 44.1 in March, from 47.6 in February. This was the worst reading since July 2012 in the midst of the eurozone sovereign debt crisis, IHS Markit noted, and also below the flash figure of 44.7.European equities were shrugging off the eurozone data at midday. The CAC 40 in Paris was up 0.5% while the DAX 30 in Frankfurt was 1.0% higher.Stocks in the US are similarly pointed to a buoyant start to the second quarter of 2019, with the Dow Jones and S&P 500 both called up 0.7% while the Nasdaq was on course to gain 1.0%. In the US economic calendar are retail sales at 1330 BST followed by the Markit manufacturing PMI at 1445 BST and the ISM manufacturing PMI at 1500 BST. Back in the UK, the House of Commons will stage a second round of "indicative" votes on a series of rival Brexit proposals tabled by backbenchers to see if any can command a majority.The move comes as UK Prime Minister Theresa May struggles to contain the rising tensions with her Cabinet as the clock counts down to the latest EU deadline on April 12.Despite seeing her deal again defeated on Friday, the prime minister is determined to bring it back to the Commons for a fourth time - possibly as early as Tuesday - in a final roll of the dice to get it over the line.Some in Parliament believe that if MPs begin to coalesce around a "softer" Brexit in Monday's votes, it may finally convince Brexiteer hold-outs that the PM's deal now represents the "hardest" break with the EU available.On the London Stock Exchange at midday, WPP was helping to boost the FTSE 100 after receiving a rating upgrade from Deutsche Bank. The advertising and marketing firm rose 2.9% after the German bank lifted its recommendation to Buy from Hold, saying WPP shares are discounting negative news so heavily that even the delivery of current guidance would be enough for the stock to enjoy a re-rating. Meanwhile, London's miners gained on the upbeat manufacturing data from China, a big consumer of metals. Rio Tinto was up 2.8%, BHP up 2.7%, and Glencore up 2.6% at midday.Low-cost airline easyJet dragged at the other end of the index, slipping 7.8% after issuing a downbeat outlook for the second half of its financial year amid "many unanswered questions surrounding Brexit".For the financial first half ended March, easyJet expects to report a headline pretax loss of around GBP275 million. This compares to a headline loss of GBP18 million a year ago. The airline guided for a 7.4% decline in revenue per seat at constant currency, in line with previous guidance of a mid-to-high single digit decline for the half.For the second half, easyJet expects revenue per seat at constant currency "slightly up", reflecting a weakening in third-quarter demand but an expected year-on-year uptick in the fourth quarter driven by "a programme of yield initiatives and an assumption of a more certain Brexit outlook"."Whilst easyJet will deliver first-half results in line with expectations, macroeconomic uncertainty and many unanswered questions surrounding Brexit are together driving weaker customer demand in the market, such that we are seeing increasing softness in ticket yields in the UK and across Europe," it said."Given this uncertainty our outlook for the second half is now more cautious," the airline added.The update from easyJet knocked other airline stocks as well, with British Airways owner International Consolidated Airlines down 1.8% at midday, central and eastern Europe-focused Wizz Air down 4.3%, and budget flier Ryanair down 3.8%.In the FTSE 250, postal operator Royal Mail rose 1.9% after Berenberg raised the stock to Hold from Sell. "While we still think that the company needs to increase investment and that there is a good chance the dividend is cut, those risks now look priced in," Berenberg commented.Elsewhere on the Main Market, Debenhams shares fell 8.4% after Sports Direct International said it has been contacted by "a number" of the department store's shareholders expressing support for the sports retailer's board requisition action. Sports Direct said Debenhams shareholders have contacted the company expressing concerns regarding the protection of their own interests amid a refinancing of Debenhams and expressing their support for the appointment of Sports Direct boss Mike Ashley as the new chief executive of Debenhams. In a separate attempt to take control of Debenhams, last week Sports Direct priced a potential offer for the remaining shares it does not own at 5 pence each, valuing Debenhams at GBP61.4 million.On Friday however, Debenhams said the offer, as well as all other proposal by Sports Direct, "did not provide a solution to the group's immediate working capital needs" leaving the company forced to proceed with the loan refinancing.Sports Direct shares were up 0.1% at midday Monday.