London close: Stocks close higher on upbeat China trade data

The FTSE closed in positive territory on Wednesday after China’s trade surplus unexpectedly widened, soothing concerns about the nation’s flagging economy.

China’s trade surplus grew to 382.05bn yuan in December from 343.10bn yuan in November, beating analysts’ forecasts of 338.80bn yuan.

Exports rose by 2.3% in December following a 3.7% dip a month earlier. Economists had pencilled in a 4.1% drop.

Imports declined 4% last month, compared to analysts’ estimates for a 7.9% fall and November’s 5.6% slide.

“China’s trade data for December support our view that, despite the turmoil in Chinese financial markets, there has not been a major deterioration in its economy in recent months,” according to Capital Economics.

“Meanwhile, another large trade surplus last month provides a cushion for the People’s Bank in the face of soaring capital outflows.”

The People’s Bank of China fixed the yuan at 6.5630 to the dollar on Wednesday, marking the fourth day that the central bank has kept its yuan guidance roughly stable.

The yuan traded at 6.5752 to the dollar in the offshore market, slightly stronger than 6.5770 late Tuesday.

Meanwhile, oil prices swayed between gains and falls as US weekly supply data showed inventories of crude oil and refined products hit record highs, adding to worries about an oversupply in the market.

Inventories of gasoline increased by 8.4m barrels in the week to 8 January, following a 10.6m barrel build the previous week, beating expectations for a 1.6m build, data from the Energy Information Administration revealed.

At 1626 GMT, Brent fell 0.52% to $30.70 per barrel and WTI rose 0.71% to $30.66 per barrel.

In the Eurozone, industrial production rose 1.1% in November from a year ago, following a 2% increase in October. Analysts had predicted a 1.3% gain.

Across the Atlantic, mortgage applications for the week of January 8 rebounded 21.3% according to the Mortgage Bankers Association.

Still to come, Federal Reserve policymaker Eric Rosengren speaks in Iowa at 1730 GMT and the central bank publishes its Beige Book at 1900 GMT.

In company news, miners rallied on upbeat China trade data with Rio Tinto, Anglo American and Glencore sitting higher.

Premier Oil’s shares were suspended from trading on Wednesday morning pending the announcement of a potential acquisition of assets which may be classed as a reverse takeover under the Financial Conduct Authority listing rules. Later in the day the group announced it had struck a deal to acquire E.ON’s UK North Sea assets for a net $120m (£83.3m) plus working capital adjustments.

J Sainsbury declined after reporting a 0.4% drop in like-for-like retail sales over the festive third quarter. However it was less than the 0.7% forecast, leading the grocer to say that the second half as a whole is likely to be better than the first.

Sports Direct advanced after it snapped up an 11.5% stake in Umbro and Lee Cooper-owner Iconix Brand Group and 2.3% of US retailing giant Dick's Sporting Goods. The group last week warned on profits amid widespread criticism about the treatment of its staff.

Lloyds Banking Group was the biggest faller after Exane BNP Paribas downgraded the stock from ‘neutral’ to ‘underperform’ on a bleak operational outlook for UK banks.

Galliford Try was a high riser after the construction group pointed to solid trading across the board in the first half, as its order book rose in an improving market.

Market Movers

FTSE 100 (UKX) 5,949.01 0.33%
FTSE 250 (MCX) 16,695.77 0.05%
techMARK (TASX) 3,162.85 0.35%

FTSE 100 - Risers

BP (BP.) 335.85p 3.95%
Shire Plc (SHP) 4,269.00p 3.77%
Babcock International Group (BAB) 988.00p 3.51%
Sports Direct International (SPD) 425.80p 3.35%
Capita (CPI) 1,191.00p 2.14%
St James's Place (STJ) 936.50p 2.02%
Rio Tinto (RIO) 1,683.50p 1.91%
Standard Life (SL.) 375.00p 1.82%
Centrica (CNA) 210.20p 1.74%
Fresnillo (FRES) 693.00p 1.69%

FTSE 100 - Fallers

Merlin Entertainments (MERL) 429.80p -2.69%
Lloyds Banking Group (LLOY) 67.64p -2.40%
Provident Financial (PFG) 3,160.00p -2.14%
London Stock Exchange Group (LSE) 2,531.00p -2.05%
Sky (SKY) 1,083.00p -1.81%
easyJet (EZJ) 1,690.00p -1.74%
Antofagasta (ANTO) 368.10p -1.60%
International Consolidated Airlines Group SA (CDI) (IAG) 589.50p -1.50%
Whitbread (WTB) 4,136.00p -1.50%
TUI AG Reg Shs (DI) (TUI) 1,251.00p -1.42%

FTSE 250 - Risers

Electrocomponents (ECM) 237.40p 6.17%
Home Retail Group (HOME) 149.80p 5.57%
Acacia Mining (ACA) 181.00p 5.54%
Ophir Energy (OPHR) 85.25p 4.73%
Tullow Oil (TLW) 128.90p 4.71%
AO World (AO.) 156.00p 4.00%
G4S (GFS) 224.60p 3.98%
JD Sports Fashion (JD.) 1,058.00p 3.83%
Centamin (DI) (CEY) 64.40p 3.45%
Spire Healthcare Group (SPI) 314.60p 3.38%

FTSE 250 - Fallers

Mitie Group (MTO) 280.10p -6.94%
BBA Aviation (BBA) 171.30p -6.09%
Aldermore Group (ALD) 202.20p -5.43%
Vedanta Resources (VED) 223.40p -4.53%
Virgin Money Holdings (UK) (VM.) 327.60p -3.76%
CLS Holdings (CLI) 1,722.00p -3.58%
Renishaw (RSW) 1,712.00p -3.28%
Aveva Group (AVV) 1,438.00p -2.97%
IP Group (IPO) 190.30p -2.96%
Allied Minds (ALM) 348.10p -2.90%