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China data fails to enthuse FTSE but Kentz jumps

China data fails to enthuse FTSE but Kentz jumps

European stock markets failed to rouse themselves towards a second consecutive day of gains, despite better than expected economic data from China.

Kentz (KENZ.L) broke out of the Monday morning slumber though, leaping over 9% to 635p after the engineering and construction group announced it was buying US company Valerus Field Solutions for $435 million in cash.

‘A larger-than-expected acquisition should strengthen Kentz process engineering offering and expand its footprint in the Americas’, commented Liberum analyst Andrew Whittock who rates Kentz a buy. ‘The price looks reasonable and our initial reaction is that the deal should be well received,’ he added.

The FTSE 250 on which Kentz resides rose 0.1%, but London’s flagship FTSE 100 – which has fallen for five weeks in a row – lagged behind, down 0.1% at 6,545.

Miners including Fresnillo (FRES.L), Antofagasta (ANTO.L) and Randgold (RRS.L) led the index lower, despite some forecasting-busting data reports from China.

China’s exports growth rebounded to a seven-month high of 12.7% year on year in November, up from 5.6% in October. Imports though grew by just 5.4%, a five month low.

Consumer price inflation meanwhile slowed more than expected from 3.2% in October to 3% in November.

‘As the growth momentum seems to have held up well, the monetary policy should stick to the neutral stance,’ commented Wei Yao, an economist at Societe Generale.

HSBC UK spin-off

HSBC (HSBA.L) shares were little moved, up 0.1% to 660p, after newspaper reports that the bank had sounded out investors about a flotation of its UK arm.

Espirito Santo analyst Shailesh Raikundlia pencilled in an extra 60p on top of his 850p target price for HSBC should the reports prove correct. ‘Such a move would crystallise a higher rating for the whole group, especially in the light of buoyant investor sentiment on the UK economy,’ commented the analyst.

Tullow Oil (TLW.L) dropped 2.6% to 876p after telling shareholders that it had failed to find oil in a well in Ethiopia

Aviva (AV.L) was among top blue chip risers, up 2.1% to 428p, after Bank of America Merrill Lynch added the insurance company to its list of top picks.


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