Rally moves into its second day

Chinese markets and economic data offer mixed messages for investors, but the FTSE 100 has managed to rise by 60 points nonetheless.

China flag
Source: Bloomberg

The divergence between Chinese markets and economic data has seen investors struggling to decipher the confusing picture coming out of Asia.

The Shenzhen might still be suffering from volatility, but European traders have decided to focus on the improving Chinese trade balance.

Overnight trading has seen oil break below $30 a barrel as bearish momentum towards the commodity has picked up pace. Adding to the confusion has been rumours circling the markets that an emergency OPEC meeting could be called.

Yesterday saw Sainsbury’s increase its market share in contrast to the other big four food retailers and today’s trading statement highlights why, with increased sales but falling profits. Disappointingly, Sainsbury’s has not offered any more clarity on what its plans are following its bid for Home Retail Group. The synergies between the two, especially the Argos arm, are clear for all to see.

Barratt Developments has followed the template of other housebuilders, with improving sales and profit margins along with the acquisition of more land. With the headwinds of changes to tax for the buy-to-let market, and the uncertainty of Brexit, Barratt might be cautious about helping the chancellor with his home-building target.

There are mixed fortunes in the oil sector with Premier Oil suspending its listing, while Tullow Oil talks optimistically about its hedging policy for 2016, secured at $75 a barrel. With BP announcing a 5% cut in total global jobs these low prices are squeezing both the little and the large. 

This afternoon will see the latest US oil inventory figures released, but with the US finally seeing a cold snap demand might finally start to play a part in prices.

Ahead of the open we expect the Dow Jones to start 68 points higher, at 16,584.

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