UK shares soak up Chinese data and Plan B Brexit; FTSE ended +0.03%

Markets took the Chinese data in its stride, with mixed levels of optimism over the results. The data showed that GDP has slowed to 6.4% in the fourth quarter, in line with expectations, but it represents the slowest rate of growth since the financial crisis.

"The only slight disappointment was fixed assets investment, which rose 5.9% y/y (mkt 6.0% y/y, last 5.9% y/y). While not disappointing, activity is still weak. For example, retail sales ytd fell to its lowest since Nov 2003. Separately, weaker manufacturing PMIs are in contraction territory and point to weakness in IP going forward. GDP is also likely to soften further over coming quarters as trade worsens. It is unlikely that targeted stimulus does much but soften the blow," analysts at TD Securities argued. Still, clutching at straws, Chinese retail sales and industrial production figures came in better than expected and markets are seeking out the positives from the data.

More pressing matters, on the domestic front, stays with Brexit. Prime Minister Theresa May's Plan B was as expected - No changes were presented to The Commons and she intends to find a common ground of solutions at home before heading to Brussels to negotiate a deal that can appeal to all sides in a hung UK parliament. The markets are cautious although, in the main, are going with the soft Brexit sentiment. 

On the corporate news, airlines did well with British Airways owner IAG and Wizz Air higher as oil prices flatlined and as HSBC upped its stance on Ryanair to 'buy' from 'reduce'. On the flipside, housebuilders Taylor Wimpey and Berkeley fell as investors dwell on the Rightmove data that showed the UK's property market suffering its slowest start to the year this January since 2012. House prices rose by 0.4% in the month this month, which was the lowest monthly rise this time of year since January 2012.

Best and worst

The top three performers were Melrose Industries (MRO) 172.75p 1.89%, Hargreaves Lansdown (HL.) 1,862.00p 1.50% and DCC (DCC) 6,515.00p 1.40%. The worst three were Kingfisher (KGF) 217.70p -4.01%, Antofagasta (ANTO) 830.60p -2.83% and Smurfit Kappa Group (SKG) 2,164.00p -2.43%. 

FTSE levels

Bulls remain in charge following the strong bull reversal candle that concluded last week's price action,  charting at bullish daily Marubozu Japanese candlestick formation which closed above the psychological 7000 level. Bulls look for a break above the 38.2% Fibo retracement of late May 2018 decline to YTD lows located in the 7040s, although the proximity, of the 100-D SMA at 7057 could be a challenge ahead of the prior daily fractals that have accumulated just below the 50% Fibo of the same range located just above 7200. Both RSI and MACD are leaning with a bullish bias.