Positive Chinese data sees the FTSE grow to highest level since March
BRITAIN’S top share index rose to a seven-month closing high ysterday, bolstered by mining stocks on a reassuring economic outlook from top metals consumer China.
Chinese economic growth slowed to 7.4 per cent year-on-year during the third quarter, as expected, but industrial output and retail sales data for September beat forecasts, paving the way for improvement in the final months of the year.
Kazakhmys, Rio Tinto and Eurasian Natural Resources led the miners higher, enjoying respective gains of 2.7 per cent, 2.4 per cent, and 2.2 per cent.
The UK benchmark ended the session 6.14 points, or 0.1 per cent, firmer at 5,917.05, its highest close since 19 March.
GKN was among the top risers on the FTSE 100, up 3.4 per cent in heavy trading volume, with traders citing takeover rumours and bargain hunting after recent falls.
One London-based trader pointed to talk of a 350p a share bid from a Chinese suitor and three traders also mentioned “vague” bid talk but with no firm details.
“There could be something there. It is on a lot of broker M&A watchlists,” Manoj Ladwa, head of trading at TJ Markets, said.
As investors shifted into ‘riskier’ assets such as the miners, defensive stocks found themselves firmly out of favour, with tobaccos and brewers the worst off.
Weakness was seen among banks, with sentiment surrounding the sector dented after Barclays set aside another £700m to cover the cost of compensation for mis-selling insurance policies (PPI). Barclays fell 1.5 per cent during the day.