Strong trade data from China was enough to offset disappointing results from Tesco this morning and push UK stocks to their highest level of the year.
Gobal shares rallied on the latest sign that the process of rebalacing in the world’s second largest economy is on course. Exports from China jumped by 11.5 per cent in March in dollar terms - the first monthly increase since last summer and well above economists’ expectations. Imports continued to drop, for the 17th consecutive month, though the decline of 7.6 per cent was less severe than forecasts of around 10 per cent.
Equity markets surged. The FTSE 100 put on 82 points to reach 6,324 - comfortably the highest level of the year. In France, the CAC was up 2.06 per cent and the German Dax climbed 2.03 per cent.
13 April 2016 @ 9:45amFTSE 100 (UKX)
Increased demand for raw materials in China pushed up London's miners. Anglo American jumped by 6.4 per cent to 679p - taking its gains over the last week to more than 30 per cent. Rio Tinto and BHP Billiton were also big winners - up over five per cent each.
Tesco, however, was the biggest faller, down 3.5 per cent to 189p, as markets were less than impressed with the pace of the supermarket giant's turnaround. Sales grew 0.1 per cent over the year, but consensus forecasts had predicted something closer to 15 per cent. Its losses spilled over into the rest of the sector, with Morrisons and Sainsbury's also down a smidge.
13 April 2016 @ 9:45amTesco (TSCO)
It's been a busy morning for the UK grocery industry as US-owned McCormick couldn't put the cherry on top of its £1.5bn attempt to snap up Premier Foods. Premier shed more than 25 per cent on the news, dropping to 42.5p a share.
Back in Asia, the Shanghai composite put on 1.6 per cent and the Japanese Nikkei shot up by 2.8 per cent as the yen continued to weaken.
Eyes will now turn to Friday when we’ll get crucial estimates of how much the Chinese economy grew in the first quarter. A poll of economists for Bloomberg forecast expansion of 6.7 per cent, down from 6.8 per cent in the final three months of last year.
Yesterday, the International Monetary Fund (IMF) raised its outlook for the Chinese economy - one of only a handful of countries around the world which saw its growth forecasts increased rather than cut. The IMF expects China's economy will climb 6.5 per cent over the year - within the government’s target range of between 6.5 and seven per cent.