European equities, along with Britains headline index, rose on Friday after recent weak data points from China, which spurred fears of a slowdown in the worlds second-biggest economy, prompted Premier Li Keqiang to announce that the government will safeguard its growth target and will push ahead with infrastructure investment. A brighter economic outlook in the US after a spite of overall upbeat recent data also supported global equities. Investors eyed the upcoming U.K. fourth-quarter final GDP, due at 9:30 GMT, as well as Eurozone confidence figures.
Britains FTSE 100 index rose by 0.61%, or 39.98 points, to 6 628.30 points by 9:08 GMT, having shifted in a daily range between 6 629.80 and 6 602.30 points. The blue-chip index fell by 0.26%, or 16.98 points, on Thursday to close at 6 588.32 points, as miners were hit by growing fears of an economic slowdown in China.
European equities rallied on Friday, led by basic resources shares, after Chinese Premier Li Keqiang reassured investors that Beijing was ready to safeguard its economic growth target and increase spending in infrastructure, which has the potential to lift prices of metals and boost the regions stock market.
Global equities also continued to draw support amid a brighter US outlook. The US economy expanded at a 2.6% annualized rate in the final three months of 2013, slightly below analysts’ expectations of a 2.7% gain, but up from a preliminary estimate of 2.4%, a report by the the Bureau of Economic Analysis showed. The US gross domestic product grew by 4.1% in the third quarter.
Data also showed that personal consumption expenditures rose 3.3% in the fourth quarter, the most since the final three months of 2010, exceeding analysts’ projections of a 2.8% increase and up from an initial estimate of 2.6%. Consumer spending is regarded a key economic indicator as it typically accounts for almost 70% of the US economic growth.
Strong consumer spending on services, especially in the health care sector, helped boost the expansion, a sign this year’s slowdown can be partly attributed to the inclement weather.
Earlier in the week, the Commerce Department reported a surprisingly large jump in orders for durable goods in the US. Bookings for items meant to last more than three years rose by 2.2% in February, reflecting solid growth in demand for autos. Analysts had expected a moderate rebound to 1% growth from the preceding period’s downward revised 1.3% contraction. This comes after data by the Conference Board showed on Tuesday that US consumer confidence jumped to a six-year high in March.
Market players are now eyeing the upcoming U.K. fourth-quarter final GDP figures, which are expected to show a 0.7% growth on quarterly basis, flat from the previous three months. Year-on-year, GDP growth is expected at 2.7%, unchanged from the preceding period as well.
Investors also awaited the release of euro zone confidence readings. A report at 10:00 GMT will likely show a jump in economic confidence to 101.4 in March, up from 101.2 in February, while industrial sentiment is expected at -3.0, up from -3.4 in the preceding period.
Gainers, losers
No blue-chip companies are set to release results today. The FTSE 100s top three gainers for the day are Glencore Xstrata Plc, Fresnillo Plc and Anglo American Plc, boosted by China spending optimism.
Glencore Xstrata rose by 2.74%, or 8.43 pence, to 315.53 pence by 8:59 GMT, while Fresnillo was up 2.57%, or 21.50 pence, to trade at 859.00 pence. Anglo American was up 2.52%, or 37.50p, at 1 524.50 pence.
The FTSE 100s top three losers for the day are Resolution Ltd, Aviva Plc and Legal & General Plc.
Resolution Ltd plunged 10.61%, or 33.85 pence, to 285.15 pence by 9:03 GMT, while Legal & General Plc lost 4.45%, or 9.40 pence, and stood at 202.95 pence.
Aviva Plc fell by 6.19%, or 29.95 pence, to 453.55 pence after Aviva Investors, Avivas asset management business, announced it will sell its U.S. equity manager River Road Asset Management to Affiliated Managers Group, Inc.
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