City Watch: Data from China has helped FTSE 100 shrug off minor weakness, says Mark Marshall

Mark Marshall of Charles Stanley & Co.

Mark Marshall of Charles Stanley & Co.

Solid manufacturing data from China last week has come as something of a relief to investors worried about the impact of any slowdown in China’s rate of growth.

This has been evident in the recent behaviour of the FTSE 100 which has shrugged off recent minor weakness and responded also to some decent corporate results.

In European markets, expectations that the US Federal Reserve would row back on its plans to taper its current quantitative easing scheme before the end of the year has seen government bond yields fall while stocks have tended to be in downbeat mood. In the US, stocks have been in positive territory buoyed by tapering expectations and robust earnings reports.

The Co-op Group and Bank have now released details of its recapitalisation plan for the bank and under pressure from activist shareholders and hedge funds. The new deal offers better prospects for bond holders and particularly those who came into the bank having held Brittannia Permanent Interest Bearing Shares or PIBS. Under the first set of proposals bond holders would have been asked to bear a larger part of the rescue package and have their bonds converted into equity. A further announcement giving details of the plan will be made on November 4.

Third quarter results from BP are due today and will include a full three-month contribution from Rosneft. However, the Gulf of Mexico oil spill continues to overshadow the group and it is unlikely that investors will be any clearer on whether BP will be pronounced as grossly negligent until 2014. BP has argued that the accident was the result of multiple causes, involving multiple parties.


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Third quarter results are also due this Thursday from BG Group, Royal Dutch Shell, AstraZeneca and Smith & Nephew.

: : Mark Marshall is an investment manager with Charles Stanley & Co in Ipswich.

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