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London open: Investors focus on positives from Chinese data
Stocks moved higher at the start of trading as investors chose to focus on the positives from the raft of Chinese macroeconomic data published before the start of trading.
As of 09:12 the Footsie was standing higher by 12.85 points to reach 6,390.85, while the Shanghai Stock Exchange’s Composite Index was down slightly, by 0.14% to reach 3,386.70.
Figures from China’s statistics office revealed the country’s gross domestic product expanded at a 6.9% year-on-year clip over the three months ending in September, down a touch from the 7% pace seen in the first two quarters of 2015.
Economists had pencilled in growth of 6.8%.
Nonetheless, the breakdown of the data suggested that stronger growth on the services side of the economy mostly offset weaker factory output, analysts at Capital Economics said in reaction to the data.
Data on industrial production and retail sales for September, also published on Monday, seemed to validate that assessment.
“With stronger fiscal spending in the pipeline and credit growth accelerating, we continue to see some potential upside to growth over the coming quarters,” said Julian Evans-Pritchard, Chief China economist at the think-tank.
“The Chinese data should really be seen as win win from an investor standpoint. The GDP reading was better than the market was expecting which ensures that the 2015 7% target is still achievable, while industrial production and fixed asset investment figures were so weak that further monetary and fiscal stimulus this year looks increasingly likely,” chimed in Craig Erlam, Senior Market Analyst at Oanda.
Investors were now expected to turn their attention towards speeches later in the day from two Fed speakers, Governor Lael Brainard, and the president of the Federal Reserve bank of Richmond, Jeffrey Lacker.
Shire reassures Lifitegrast will launch in 2016
ITV will purchase UTV Media’s television assets for £100m.The FTSE 100 listed broadcaster announced the deal on Monday, which is subject to regulatory and shareholder approval. It said once the deal is approved, ITV will hold 13 of the 15 regional licences for the Channel 3 network.
Ahead of third-quarter results due on Friday, Shire has attempted to reassure the market that its lifitegrast dry-eye treatment remains on track for planned launch next year. After US regulators on Friday said they did not have enough data to grant the drug prescription status yet, chief executive Flemming Ornskov, said a major study has now been completed and top-line data are expected before the end of the year. “If the study is positive, we plan to refile our liftegrast submission in the first quarter of 2016”.
Carillion has signed a contract with the Homes and Communities Agency to regenerate Tower Works in Holbeck Urban Village on Leeds’ South Bank. The construction and support services company said the contract adds to the £1.7bn of new business it has won since the half year, as announced on 12 October. The combined value of the proposed development is around £80m and a site-wide masterplan will be submitted for planning approval shortly subject to which construction work is expected to begin in Spring next year.
