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FTSE 100: This morning’s risers and fallers

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Reports that China´s central bank has restarted lending to its main so-called policy banks and what some analysts interpreted as a dovish set of Fed minutes gave a modest boost to London equities.

The FTSE 100 was trading higher by 19 points at the 6,840.27 point mark as of 09:05.

The HSBC Chinese manufacturing PMI came in at 49.7 for May, notably ahead of the 48.3 that had been expected and above the previous month’s reading of 48.1.

That implies a strengthening in sequential growth momentum to 6.8 per cent in annualised termns in the second quarter from the 5.8 per cent seen over the first three months of the year, Barclays Research pointed out.

However, Barclays analysts Serena Zhou and Jian Chiang added that: “We have noted the risks of a property bubble bursting and think the ongoing correction in the property market remains a key to watch for growth and policy response.”

Precisely in that regard, 21st Century Business reported overnight that the People´s Bank of China (PBoC), the country´s central bank, has provided between 300-500bn yuan in fresh funds to China Development Bank to be used for the government’s public housing programme.

Fed rate rise not imminent

US stocks ended higher after the Federal Reserve meeting minutes showed officials forecast a rebound in growth.

The Fed last month decided to taper monthly bond purchases by a further $10bn to $45bn, citing improvements in the economy and in the jobs market.

A European-based strategist from one of Wall Street´s largest brokers highlighted to Sharecast that the minutes main message is that a rate rise is not “imminent”. As far as the Fed is concerned maintaining current stimulus so as to lower unemployment does not equate to significant inflation risks down the road.

French PMI undershoots

The latest set of French manufacturing and service sector purchasing managers indices surprised sharply to the downside in May.

Commenting on the numbers Jack Kennedy, senior economist at Markit, said: “France’s stuttering economic performance continued in May, with new orders and employment both falling at sharper rates in the latest month, the malaise looks set to persist.”

The headline services sector purchasing managers index (PMI) fell to a reading of 49.2 in May, from 50.4 in the month before (consensus: 50.4).

In parallel, the manufacturing gauge slipped to reading of 49.3 from 51 in April (consensus: 51.2).

Emerging markets prop up volumes at SAB Miller

A taste for lager among drinkers in emerging markets helped annual adjusted profits to fizz up by 2 per cent to $5.7bn at brewing group SABMiller, although volumes declined in Europe and North America.

Miners such as Antofagasta and emerging market related issues like Aberdeen Asset Management were performing well in the early going on the heels of the above Chinese manufacturing survey figures.

Royal Mail reported a 2 per cent rise in annual revenue to £9.45bn in its first full-year results since floating on the London Stock Exchange in October 2013. The company said parcel deliveries were the biggest contributor to growth, offsetting a fall in letter delivery revenue. “A promising set of results was eclipsed by the company’s clear concerns around Universal Service pricing,” Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, commented.

Unilever has agreed to sell its North America pasta sauces brands, Ragu and Bertolli, for $2.15bn cash to Japan’s Mizkan Group. The annual turnover for Ragu and Bertolli is more than $600m.

UK water and wastewater giant United Utilities delivered a strong set of annual results and believes there is scope to deliver further improvements. The group also confirmed it is working closely with Ofwat, ahead of submission of its revised business plan at the end of June. Customers are set to benefit from below inflation growth in average household bills for the decade to 2020, it explained.

Goldman Sachs today upgraded its recommendation on shares of Asos to ‘buy’ from ‘neutral’.

The same broker has taken Prudential off of its ‘Conviction Buy’ list.

FTSE 100 – Risers
SABMiller (SAB) 3,384.00p +3.82%
British American Tobacco (BATS) 3,620.00p +2.67%
Petrofac Ltd. (PFC) 1,248.00p +2.30%
Antofagasta (ANTO) 787.00p +2.08%
Aberdeen Asset Management (ADN) 437.30p +1.93%
Fresnillo (FRES) 845.00p +1.87%
Rio Tinto (RIO) 3,247.50p +1.82%
Imperial Tobacco Group (IMT) 2,695.00p +1.81%
Royal Dutch Shell ‘A’ (RDSA) 2,391.50p +1.66%
Glencore (GLEN) 331.40p +1.52%

FTSE 100 – Fallers
Royal Mail (RMG) 540.00p -6.09%
Royal Dutch Shell ‘B’ (RDSB) 2,500.00p -2.02%
AstraZeneca (AZN) 4,351.00p -1.56%
Prudential (PRU) 1,386.00p -1.18%
Marks & Spencer Group (MKS) 449.40p -0.64%
RSA Insurance Group (RSA) 488.50p -0.59%
Vodafone Group (VOD) 203.65p -0.46%
Friends Life Group Limited (FLG) 305.80p -0.46%
Royal Bank of Scotland Group (RBS) 329.10p -0.42%
GlaxoSmithKline (GSK) 1,628.50p -0.31%

Source: ShareCast