London midday: Stocks stay up as Prudential, miners rally on China boost

London stocks were still up but off earlier highs by midday on Thursday, having taken their opening cue from strong gains in Asia after China pledged more measures to underpin the economy.

The FTSE 100 was up 0.2% at 8,282.28.

Sentiment got a boost after China said it would deploy "necessary fiscal spending" to meet its full-year growth target of roughly 5%.

Investors were also mulling a report suggesting that China is considering injecting up to 1 trillion yuan of capital into its biggest state banks. According to Bloomberg, the move is part of broad stimulus measures announced this week by Beijing to boost the country’s markets.

Bloomberg cited people with knowledge of the matter as saying that funding will come mainly from the issuance of new special sovereign bonds.

Richard Hunter, head of markets at Interactive Investor, said: "China was again the primary driver of market rallies across Asia, where the authorities have come out with all guns blazing this week. Overnight there was an announcement of more stimulus in the form of a pledge to prop up the ailing economy with ‘forceful’ interest rate cuts and adjustments to both monetary and fiscal policies.

"There was an additional commitment to remedy the situation within the beleaguered property sector, while the possibility of an injection of some $140 billion into its state banks was also teased. The moves over recent days have been in sharp contrast to the last few months, where an increasing investor clamour for more meaningful stimulus had apparently fallen on deaf ears.

"The Chinese cheer washed onto UK shores, with a strong open propelled by some notable gains in the mining sector as the potential for higher demand and therefore commodity prices attracted some meaningful buying interest."

On home shores, a survey showed that consumer confidence fell in September as people waited anxiously for next month’s Budget.

According to the British Retail Consortium’s latest consumer sentiment monitor - which asks about expectations for the coming three months - concerns about both the economy and personal finances have worsened.

The personal financial situation fell to -6 from 1 in August, while the state of the economy slumped to -21 in September from -8.

Personal spending on retail edged up one point to -8. But personal spending overall was a point lower at 10.

The BRC attributed the shaken consumer confidence to the upcoming Budget, with new chancellor Rachel Reeves due to address Parliament on 30 October.

The government has repeatedly warned of a £22bn "black hole" in the public finances. In August, shortly after taking office, prime minister Kier Starmer said the Budget was going to be "painful".

Helen Dickinson, chief executive of the BRC, said: "Retailers could face a turbulent few months. Negative publicity surrounding the state of the UK’s finances appears to have damaged confidence in the economic outlook, particularly among older generations.

"The Budget is a key opportunity to inject some confidence back into the economy, boosting spending and helping to foster much needed investment in businesses."

In equity markets, Prudential, Standard Chartered and Burberry - all of which are exposed to China - were among the top gainers.

Miners, which are heavily dependent on demand from China, also rose, with Antofagasta, Anglo American, Glencore and Rio all up.

Drinks maker Diageo advanced as it maintained guidance amid a "challenging" global environment for the industry. In a brief trading statement ahead of its annual general meeting, chief executive Debra Crew said consumers continued to be "cautious".

Diageo in July reported a drop in full-year organic operating profit as it pointed to a weaker performance in Latin America and the Caribbean.

Watches of Switzerland was sharply higher after an upgrade to 'buy' at Deutsche Bank.

Halma rallied after it backed its guidance for the full year as it said further progress was made in the first half in trading conditions "which remain varied across our end markets".

On the downside, oil giants BP and Shell gushed lower amid weaker oil prices, following reports that Saudi Arabia could be lifting its output. Shell was also hit by a downgrade to 'neutral' at Oddo.

British American Tobacco, Barratt Developments and Petershill Partners all fell as they traded without entitlement to the dividend.

Market Movers

FTSE 100 (UKX) 8,282.28 0.16%
FTSE 250 (MCX) 20,955.90 0.97%
techMARK (TASX) 4,832.39 0.45%

FTSE 100 - Risers

Prudential (PRU) 681.60p 6.14%
Antofagasta (ANTO) 2,026.00p 5.52%
Anglo American (AAL) 2,414.00p 5.05%
Standard Chartered (STAN) 799.40p 4.74%
Glencore (GLEN) 421.15p 4.41%
Diageo (DGE) 2,607.00p 4.38%
Spirax Group (SPX) 7,485.00p 3.81%
Entain (ENT) 770.80p 3.30%
Rio Tinto (RIO) 5,239.00p 3.19%
Halma (HLMA) 2,666.00p 2.70%

FTSE 100 - Fallers

Shell (SHEL) 2,434.50p -3.85%
BP (BP.) 385.00p -3.81%
British American Tobacco (BATS) 2,747.00p -3.34%
Unilever (ULVR) 4,821.00p -1.63%
Barratt Developments (BDEV) 481.30p -1.57%
BAE Systems (BA.) 1,258.00p -1.26%
Tesco (TSCO) 361.50p -1.20%
London Stock Exchange Group (LSEG) 10,270.00p -1.06%
Compass Group (CPG) 2,433.00p -0.90%
Haleon (HLN) 389.60p -0.89%

FTSE 250 - Risers

Fidelity China Special Situations (FCSS) 199.60p 6.40%
Burberry Group (BRBY) 646.40p 5.86%
Watches of Switzerland Group (WOSG) 450.20p 5.68%
Wizz Air Holdings (WIZZ) 1,413.00p 5.06%
PureTech Health (PRTC) 152.20p 3.96%
Renishaw (RSW) 3,630.00p 3.57%
Ocado Group (OCDO) 364.10p 3.41%
4Imprint Group (FOUR) 5,040.00p 3.38%
Hill and Smith (HILS) 2,070.00p 3.24%
JPMorgan Japanese Inv Trust (JFJ) 555.00p 3.16%

FTSE 250 - Fallers

Petershill Partners (PHLL) 213.50p -4.26%
Future (FUTR) 986.50p -3.85%
Ithaca Energy (ITH) 105.50p -2.31%
Raspberry PI Holdings (RPI) 381.30p -2.13%
Pennon Group (PNN) 588.50p -1.92%
Harbour Energy (HBR) 265.10p -1.34%
Harworth Group (HWG) 182.00p -1.09%
BH Macro Ltd. GBP Shares (BHMG) 374.50p -0.93%
Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 275.50p -0.90%
Aston Martin Lagonda Global Holdings (AML) 155.00p -0.83%