UPBEAT CHINESE DATA TO LIFT STOCKS AT THE OPEN

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LONDON (Alliance News) – UK stocks are called higher on Tuesday, the first trading day of 2017, building on the recent record high hit by London’s blue-chip index.

IG says futures indicate the FTSE 100 to open 22.97 points higher at 7,165.80. In its last trading session on Friday, the index closed up 0.3%, or 22.57 points, at 7,142.83 on Friday, its highest ever level.

In Asia on Tuesday, the Shanghai Composite closed up 1.0% and the Hang Seng in Hong Kong continues up 0.7%. The Tokyo market is closed for a bank holiday.

China’s manufacturing activity expanded at the fastest pace in nearly four years in December, driven by a strong upturn in production and new orders, survey results from IHS Markit showed.

The Caixin purchasing managers’ index rose to 51.9 in December from 50.9 in November. A 50-plus score suggests expansion in activity and the latest reading pointed to the fastest rate of improvement in the health of the factory sector since January 2013.

However, the official PMI suggested a mild slowdown in the manufacturing sector growth at the end of the year. The official factory PMI fell to 51.4 in December from 51.7 in November.

“The Chinese manufacturing economy continued to improve in December, with the majority of sub-indices looking optimistic,” Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin Insight Group, said.

Later in the day, there are Markit manufacturing PMI reading for the UK is at 0930 GMT. The same for the US is at 1445 GMT and the ISM manufacturing PMI for the US is at 1500 GMT.

Elsewhere in the economic calendar, German unemployment figures and consumer inflation are at 0855 GMT and 1300 GMT, respectively and US construction spending is at 1500 GMT.

In early UK corporate news, London Stock Exchange Group said it has received a cash offer to acquire its LCH SA French clearing house business from European exchange operator Euronext.

Euronext has offered to pay EUR510.0 million for the LCH SA business, which LSE Group is selling in order to remedy any regulatory concerns about its proposed merger with Germany’s Deutsche Boerse.

The sale of LCH SA would be subject to approval by the European Commission and be conditional on the merger successfully completing.

Property listings portal Rightmove said it has begun a GBP17.0 million share buyback programme. The company said the programme, which commenced on Tuesday, will run until February 23. The maximum number of shares to be purchased will be 414,634.

The maximum price to be paid for the shares will be no more than 105% of the average middle market closing price of Rightmove’s shares for the five dealing days prior to the date of purchase, the group said. Shares in Rightmove closed flat at 3,903.00 pence on Friday.

Soft drinks maker Britvic said it is buying Brazilian concentrates and juice business Bela Ischia Alimentos Ltda for BRL218 million, or around GBP54.5 million at current exchange rates.

Britvic, which makes the Robinsons squash and J2O juice drink brands, said it will fund the acquisition from existing debt facilities, just over a year after it bought Brazilian soft drinks company Empresa Brasileira de Bebidas e Alimentos SA and concentrate brands Maguary and Dafruta in Brazil in late 2015.

Britvic expects to achieve “substantial” annual cost synergies from its latest acquisition and anticipates the merger to be earnings per share accretive in the first full year of ownership. Revenue benefits are also expected to be generated from marketing the wider brand portfolio across a wider geographical presence.

In New York on Friday, the Dow Jones Industrial Average ended down 0.3%, the S&P 500 closed down 0.5% and the Nasdaq Composite down 0.9%.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

Copyright 2017 Alliance News Limited. All Rights Reserved.

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