You might have expected more of a negative reaction from European markets this morning given the weekend’s events, but equities remain defiant despite rising concerns in both China and the Ukraine.
Chinese stocks were down 3% overnight after suffering on more than one front from the weekend’s news. Exports sank 18% in February against average estimates of a near 7.5% rise, casting further doubts over China’s ability to hit the 7.5% growth target set by Premier Li at the opening meeting of the NPC. However the greater concern may well be debt, with Friday marking the first default in China’s corporate bond market from Shanghai Chaori Solar Energy. Bulls will hope that the decision to allow the failure shows a hard stance from Beijing that might curb reckless lending, but “debt crisis” is a term that still strikes fear into the majority of investors and in the short term Chinese markets seem more that a little concerned of what is still to come.
As for the Ukraine situation, that has done little to lend a hand to the markets, with a string of nations including Germany condemning Russia’s “illegal” plans to conduct a Crimean referendum on their future. Another few days without an escalation of violence is a plus, but the political and economic side effects get more complicated every day.
Unsurprisingly given the Chinese move, Basic materials are stuck to the bottom of the FTSE
this morning, but the remainder has dragged the benchmark into the green by mid-morning.
Despite reporting a drop in profits this morning, Clarkson was up over 8% as numbers came in ahead of expectations and the board recommended a 10% increase in final dividend, the 11th straight year of increasing investor returns. The shipping services group has seen improving trading conditions in Q4 and remained positive on prospects for 2014.
Another stock on the rise was Senior, who confirmed that they have entered into an agreement to acquire Malaysian firm UPECA technologies for £75.5m in cash. The deal will complete towards the end of March and investors have given the deal the thumbs up by sending the share price over 5% higher.
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