London midday: Markets extend gains despite concerns over China

Strong gains in the financial sectors were lifting markets higher on Friday despite concerns over a slowdown in China, as investors continued to focus on dovish comments from Federal Reserve Chairman Ben Bernanke.Stock futures on Wall Street were pointing to a positive start on Friday, extending gains made the day before when both the Dow Jones and S&P 500 closed at their highest ever levels, while the Nasdaq finished at a 13-year high.Speaking after the latest Fed meeting minutes were released, the Fed chief looked to reassure markets that short-term interest rates wouldn't be rising anytime soon, even if the unemployment rate falls dramatically. He said that the US economy needed continued monetary stimulus until the labour market shows stronger signs of improvement."Just as investors were getting to grips with the notion that the Fed will taper QE soon and we will be operating in a world with reduced liquidity, the market reaction clearly suggests that investors still have a crippling addiction to liquidity," said Market Analyst Ishaq Siddiqi from ETX Capital.Given that tapering is dependent on future economic figures, Siddiqi warned that if data continues to improve, "investors cannot rule out that Bernanke will change his tune again and throw out some more taper-talk which will rile up the markets again."Limiting upside on markets this morning were comments made by Chinese Finance Minister Lou Jiwei who warned that world's second-largest economy would miss its growth target this year. Chinese state agency Xinhua quoted Lou as saying that growth would likely average 7% in 2013, below the government's 7.5% target. China grew 7.7% in the first quarter. FTSE 100: Financials provide a liftFinancial stocks were performing well early on with Aberdeen Asset Management, Prudential and Resolution giving the FTSE 100 a boost after some upbeat broker comments.UBS reiterated its 'buy' rating for Aberdeen and added the stock to its 'most preferred' list, saying that the recent share price falls have been overdone. Meanwhile, Prudential was named the top pick in the UK life insurance sector by Nomura due to its "superior growth profile". The same broker upgraded Resolution from 'reduce' to 'neutral'.Banking peers Standard Chartered, RBS and Lloyds were also higher, though Barclays was bucking the trend after Numis downgraded the stock to 'reduce'.Mining stocks were among the worst performers this morning, pulling back after an impressive rise yesterday as metals prices jumped. Chinese slowdown worries were hitting the sector today, with Fresnillo, Anglo American and Antofagasta registering moderate losses.Experian was lower despite saying it expected strong revenue growth this year after sales outpaced economic expansion in its main markets in the first quarter.Investors also gave a cool reaction to a statement by Centrica as the British Gas owner sealed a cash deal to buy Bounce Energy, a Texas-based electricity retailer with an innovative digital strategy.G4S and Serco were extending losses made yesterday after it was reported that both companies were being investigated by the Serious Fraud Office on suspicion of overcharging on government contracts.FTSE 250: Invensys rockets on takeover proposalEngineering firm Invensys jumped early on after confirming it had received a cash and paper takeover approach from France's Schneider Electric that valued the company at £3.3bn and said it would likely recommend a formal offer at this price.Phoenix Group was also making headlines on M&A activity after reporting that it is in talks with Swiss Re about combining their businesses. The deal would bring Phoenix together with the Swiss insurance giant's Admin Re business and would see Swiss Re take a minority stake in Phoenix. Oxford Instruments, which provides technology for research, was also a high riser after saying that orders, sales and profits improved towards the end of the first quarter, following a slow a start to the year.BC