London midday: Stocks rise on hopes of Monte dei Paschi bailout
UK equities advanced on Wednesday, supported by financial stocks on hopes of a bailout for Italy’s Banca Monte dei Paschi di Siena.
The FTSE 100 rose 1.54% to 6,8854.45 at 1156 GMT.
Shares in Banca Monte dei Paschi di Siena rose after La Stampa reported that Italy could ask for a €15bn European Stability Mechanism loan to help not just Paschi but also some of the country’s other struggling banks.
The news gave the rest of the sector a lift with shares in Royal Bank of Scotland, Standard Chartered and Barclays sitting higher.
Investor sentiment was also boosted by optimism that the European Central Bank will announce an extension of its bond-buying quantitative easing programme on Thursday, when it is due to make its latest policy announcement.
“Tomorrow’s meeting of the ECB will be a primary focus for traders this week, with the central bank set to announce plans to extend its quantitative easing program, most likely by another six months to September next year,” said Oanda’s Craig Erlam.
“The decision to extend the program is not as straight forward as it’s been in the past, despite the need to do so given that the central bank still falling well short of its inflation goals.”
In economic data, the Office for National Statistics revealed UK industrial production in October fell 1.3% compared to September, following on from a 0.4% drop a month ago, while production fell 1.1% versus October last year. Economists had forecast a 0.2% month-on-month rise and a 0.5% annual increase.
Manufacturing production fell 0.4% versus the consensus estimate of a 0.8% rise, while month-on-month the figure dropped 0.9% versus 0.2% forecast.
Meanwhile, UK house price growth rose a modest 0.2% month-on-month in November to £218,002, following a 1.5% increase in October, according to Halifax.
In the three months to November prices were 6.0% higher than in the same period in 2015, having slowed to a three year low of 5.2% in the three months to October.
German industrial production rose less than expected in October, according to figures released by Destatis. Industrial production was up 0.3% from September, when it dropped a revised 1.6%, missing expectations for a 0.8% increase.
In commodities, oil prices headed north after slowing a day earlier following an OPEC-fuelled rally on the cartel's landmark decision to cut production. Brent crude edged up 0.29% to $54.09 per barrel and West Texas Intermediate climbed 0.27% to $51.07 per barrel at 1155 GMT.
On the company front, train and bus operator Stagecoach was in the black after it hiked its interim dividend to show its confidence in the future and keep investors chipper as profits and earnings fell in the face of what it said was a continuing "challenging and uncertain" political and economic environment.
FTSE 250 provider of global mobile satellite communications Inmarsat advanced after signing a contract with Air New Zealand to provide Global Xpress connectivity across the airline’s long-haul and short-haul fleets.
Miner Rio Tinto was a high riser as Credit Suisse upgraded the stock to ‘outperform’ from ‘neutral’.
WPP was a top faller following reports the US Justice Department is investigating claims advertising agencies are rigging the bidding process for contracts on producing commercials in order to persuade clients to use their in-house production units over independent companies.
Support services and construction group Carillion was on the back foot as it said it is trading in line with expectations but that the pace of new order intake has dropped in the second half.
Business intelligence group Informa was weaker after it announced the issue of $500m of new US private placement notes which will be used to pay down the majority of the $675m previously arranged and drawn down acquisition facility.
Market Movers
FTSE 100 (UKX) 6,879.80 1.47%
FTSE 250 (MCX) 17,526.80 0.43%
techMARK (TASX) 3,239.23 0.51%
FTSE 100 - Risers
Rio Tinto (RIO) 3,202.00p 5.97%
Standard Chartered (STAN) 683.00p 3.96%
International Consolidated Airlines Group SA (CDI) (IAG) 431.30p 3.95%
Royal Bank of Scotland Group (RBS) 217.10p 3.83%
Barclays (BARC) 234.50p 3.42%
Old Mutual (OML) 194.30p 3.41%
GKN (GKN) 315.00p 3.38%
HSBC Holdings (HSBA) 675.40p 3.27%
Anglo American (AAL) 1,232.50p 3.18%
St James's Place (STJ) 973.50p 3.18%
FTSE 100 - Fallers
WPP (WPP) 1,650.00p -2.60%
Shire Plc (SHP) 4,503.00p -1.27%
Unilever (ULVR) 3,104.00p -0.99%
Bunzl (BNZL) 2,007.00p -0.94%
Sky (SKY) 763.00p -0.78%
Worldpay Group (WPG) 256.80p -0.77%
Croda International (CRDA) 3,147.00p -0.63%
Smith & Nephew (SN.) 1,112.00p -0.54%
Reckitt Benckiser Group (RB.) 6,518.00p -0.52%
Relx plc (REL) 1,330.00p -0.45%
FTSE 250 - Risers
Evraz (EVR) 235.50p 3.84%
Britvic (BVIC) 541.00p 3.34%
Cairn Energy (CNE) 219.70p 3.24%
IG Group Holdings (IGG) 499.00p 2.87%
Inchcape (INCH) 615.00p 2.84%
DFS Furniture (DFS) 231.60p 2.57%
Inmarsat (ISAT) 716.50p 2.50%
Paysafe Group (PAYS) 362.10p 2.46%
Mitchells & Butlers (MAB) 232.20p 2.38%
NCC Group (NCC) 200.00p 2.30%
FTSE 250 - Fallers
Carillion (CLLN) 245.50p -4.14%
Galliford Try (GFRD) 1,253.00p -3.76%
PayPoint (PAY) 927.00p -3.19%
Softcat (SCT) 289.00p -2.43%
Renishaw (RSW) 2,397.00p -2.40%
Drax Group (DRX) 303.80p -2.38%
G4S (GFS) 224.20p -2.31%
Berendsen (BRSN) 768.50p -2.23%
Fisher (James) & Sons (FSJ) 1,573.00p -2.18%
OneSavings Bank (OSB) 332.60p -2.03%