Stimulus bid by China fuels rise in stocks

Global stocks have surged after the Chinese government unveiled a stimulus package, with mining shares in focus on the London Stock Exchange.

China announced a package of policies including tax cuts and the sale of special bonds to boost domestic demand.

Metal prices powered ahead after the news broke due to the expectation of a spike in demand from China, which meant mining stocks were in demand.

By the market close, Anglo American, Glencore and BHP Billiton were all up by more than 5%, making them the three top risers on the FTSE 100.

Fiona Cincotta, senior market analyst at City Index, said: “The unveiling of a stimulus package to lift domestic demand in China, the world’s biggest consumer of metals, is going some way to counter trade war jitters.”

The FTSE 100 charged ahead, closing the day 0.7% or 53.26 points higher at 7,709.05. The Cac 40 in France surged 1.26%, while the Dax in Germany was up 1.1%.

Against the dollar, sterling was up 0.37% to 1.314. The pound was up 0.25% against the euro at 1.123.

Beijing’s stimulus announcement also lifted oil prices, with Brent crude rising 1.14% to 73.697 US dollars a barrel.

“Oil is a good barometer of how strong or weak the global economy is, and since China is the second-largest economy in the world, any increase in economic activity is likely to ripple out around the globe,” said David Madden, market analyst at CMC Markets UK.