Global stocks higher after China signals open economy
THE FTSE 100 followed global stocks higher as investors cheered comments from Chinese president Xi Jinping who signalled a willingness to open his country’s economy even further.
The remarks dampened fears over a trade war with the US, and sent London’s blue chip index up 1% or 72 points to 7,266.75 points.
Mining stocks led the charge, with Anglo American up 81.6p to 1,692p, Antofagasta up 41.2p to 952.8p, BHP Billiton up 49p at 1,434.2p, and Rio Tinto up 111.5p to 3,712p.
David Madden, a market analyst at CMC Markets UK, said: “Mining companies are clawing back some of yesterday’s lost ground.
“The message out of China is towards a more open and liberal mindset in terms of international trade.
“The second-largest economy in the world is a major importer of raw materials, and should they commit to their pledge to lower trade barriers, it is likely to benefit companies like BHP Billiton, Rio Tinto and Antofagasta.”
China’s moves towards economic liberalisation also raised spirits across the continent, with the French CAC 40 and German Dax rising 0.8% and 1.1% respectively.
Commodity markets similarly cheered the move, with Brent crude prices jumping 3% to $70.60 per barrel.
In currency markets, the pound was trading higher as investors digested comments from Bank of England interest rate setter Ian McCafferty, who said the next rate hike should not be delayed.
Sterling was up 0.2% versus the US dollar at 1.416 and rose 0.1% against the euro to 1.147.
In UK stocks, BP rose 11.65p to 505.2p after the energy giant announced plans to develop two new North Sea oil fields capable of producing up to 30,000 barrels a day.
The fields, which are located close to existing infrastructure, meaning they can be developed quickly, are expected to begin operation in 2020.
Centrica fell 1p to 142.55p as its British Gas arm confirmed it would increase energy bills for 4.1 million dual fuel customers on its standard variable tariff by an average of 5.5%, or £60 a year, blaming rising wholesale energy and Government policy costs.
Recruiter Robert Walters fell 18p to 682p despite booking a 17% rise in net fee income to £88.5m in the first quarter of 2018 on the back of strong growth in Europe and rising activity outside of London.
However, net fee growth in the UK slowed compared with the final quarter of 2017 – rising only 6% to £25.2m versus 13% in the previous three months.
Card Factory surged 24p to 214p as investors focused on signs of solid performance across the company’s 915 UK stories in the face of “tough” trading conditions, with group likefor-like sales up 2.9%.
However, the group reported a 12.3% fall in pre-tax profits to £72.6m for the year to January 31, having been hammered by rising costs as the Brexit-hit pound and national living wage took their toll.
The biggest risers on the FTSE 100 were Anglo American up 81.6p to 1,692p, Antofagasta up 41.2p to 952.8p, BHP Billiton up 49p at 1,434.2p, and Rio Tinto up 111.5p to 3,712p.
The biggest fallers on the FTSE 100 were United Utilities Group down 21.4p at 710p, Coca-Cola HBC down 74p at 2,626p, Severn Trent down 40.5p at 1,855p, and Shire down 55.5p at 3,653p.