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London open: Investors shrug off China data, Intu surges on takeover offer
London stocks rose in early trade on Friday as investors shrugged off disappointing Chinese data and ongoing worries about Brexit.
At 0835 BST, the FTSE 100 was up 0.3% to 7,045.70, while the pound was flat against the dollar at 1.3021 and 0.2% higher versus the euro at 1.1385.
Chinese growth figures out earlier were uninspiring, showing that the economy slowed more than expected in the third quarter, with annualised GDP coming in at 6.5%, its weakest quarter since 2009 and below expectations of 6.6%.
“Despite this the Chinese market rallied as the regulator stepped in with fresh measures to support liquidity and investment” said Neil Wilson, chief market analyst at Markets.com. “Growth of 6.5% rather than 6.6% is a pretty nice problem to have but the trade war with the US, higher debt levels and a depreciating currency remain a concern. Any bounce in Chinese stocks needs to be seen in the context of the three-year collapse in equities.”
Meanwhile, Brexit was still at the forefront of investors’ minds after the EU said it was ready to extend the length of the post-Brexit transition if the UK wants. EU Council president Donald Turks told reporters at the EU summit on Thursday that if the UK decides an extension would be helpful in order to reach a deal, “leaders would be ready to consider this positively”.
However, May’s concessions in Brussels – made without cabinet approval – were infuriating “all sections” of her party and sparking further plotting against the Prime Minister, newspapers reported.
In corporate news, shopping centre owner Intu Properties surged 14% after confirming it had received a possible offer from a consortium led by one of its senior to directors to buy the company at 210p a share. Intu’s deputy chairman John Whittaker’s Peel Group, which already holds around 27% of the firm, has teamed up with Saudi conglomerate Olayan Group and Canary Wharf owner Brookfield Property.
London Stock Exchange advanced after a broadly in-line third-quarter trading statement and after announcing that it was in the process of increasing its stake in LCH Group, while Man Group ticked a touch higher after it announced a new $100m share buyback.
Dechra Pharmaceuticals was on the front foot as it announced the acquisition of Brazil’s Venco for BRL185m (37.8m) and it said its performance in the first quarter was in line with management’s expectations.
On the downside, equipment rental firm Ashtead was under the cosh for the second day running after US peer United Rentals’ guidance disappointed on Wednesday. United Rentals shares ended down nearly 15% overnight.
InterContinental Hotels lost ground even after saying it had its best quarter for news signings and openings in a decade, as revenue per available room growth slowed. The company also announced a $500m special dividend and share consolidation.
Provident Financial was in the red after the doorstep lender said collections in its home credit business were still 10% below historic levels in the third quarter.
Safety and health group Halma nudged down after saying it had bought a Belgian fire control panel maker and fire system seller, while plastics maker Essentra fell as like-for-like revenue were flat in the third quarter.
In broker note action, EasyJet flew lower after a downgrade to ‘underperform’ at MainFirst, Renishaw slumped after a downgrade to ‘sell’ at Stifel, but IP Group rallied on the back of an initiation at ‘buy’ by Berenberg.
