Citywire for Financial Professionals
Stay connected:

View the article online at http://citywire.co.uk/money/article/a885110

Miners lead FTSE higher on China stimulus hints

Mining stocks race to top of FTSE 100 on hopes of further stimulus from top metals consumer China.

 
Miners lead FTSE higher on China stimulus hints

Miners have led the FTSE 100 higher as they mounted the next leg of their strong rally from 12-year lows, with investors buoyant at the prospect of more stimulus from top metals consumer China.

The UK blue-chip index rose 74 points, or 1.2%, to 6,086, with mining stocks leading the way on stronger metals prices.

That helped the index shoulder a plunge in the shares of Royal Bank of Scotland (RBS), down 8.5% at 223.2p as the bank unveiled a £2 billion loss for 2015 and postponed the resumption of dividends until 2017 at the earliest.

Glencore (GLEN) rose 5.1% to 124.8p, Rio Tinto (RIO) was up 5% at £18.94, BHP Billiton (BLT) added 4% to 717.5p and Anglo American (AAL) traded 4.8% higher at 442.3p.

That came as Zhou Xiaochuan, governor of the People's Bank of China, hinted the central bank was preparing to launch another round of stimulus.

'Equity markets are continuing their northerly march, sentiment buoyed by hopes that a G20 meeting of finance ministers to discuss global economic stimulus can deliver the goods,' said Mike van Dulken, head of research at Accendo Markets.

'Especially host China, whose central bank sees room for further easing of policy to address downside risks to its slowing economy.'

Joining mining stocks at the top of the index was Pearson (PSON), up 5.5% at 845.5p after the educational publisher maintained its dividend and said restructuring should deliver profits of £800 million or more in 2018.

'We are encouraged that Pearson has intensified its efforts to meet external and internal challenges and has committed to maintaining its dividend,' said Roddy Davidson, analyst at Shore Capital.

'Our view on the long-term outlook for global learning spend is also positive (reflecting a combination of population growth, growth in public and private sector investment, and an expanding middle class within emerging markets) and further restructuring should leave Pearson better placed to capitalise.'

Oil stocks were also in the ascendancy, as the price of Brent crude rose 2.1% to $36, as traders closed 'short' positions and data showed strong petrol demand in the US. Shell (RDSb) rose 3.4% to £16.36 while BP (BP) was up 2.2% at 346p.

Joining RBS at the bottom of the index was British Airways owner International Airlines Group (ICAG), down 4.5% at 533.5p despite posting a 64% rise in annual pre-tax profits.

'Chief executive Willie Walsh's warning that a strong dollar offsets some of the gains from the low oil price took the edge off the results, especially with oil prices rising today,' said Jasper Lawler, market analyst at CMC Markets.

'Clearly a low oil price and resulting lower fuel costs has been the single biggest factor in IAG's as well as the other European airline's success over the past year so there are some jitters over a possible base in the oil price,' he added.

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

A comprehensive approach to investing in Europe


Making the most out of Europe’s potential means seeing things differently. Learn more about how BlackRock’s focused approach to investing in Europe helps investors unlock the continent’s vast potential.

Watch Now

The Citywire Guide to Investment Trusts


In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.

Watch Now

More about this:

Look up the shares

  • Royal Bank of Scotland Group PLC (RBS.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Glencore PLC (GLEN.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Rio Tinto PLC (RIO.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • BHP Billiton PLC (BLT.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Anglo American PLC (AAL.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Pearson PLC (PSON.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Royal Dutch Shell PLC (RDSb.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • BP PLC (BP.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • International Consolidated Airlines Group SA (ICAG.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

More from us

Archive

Today's articles

Tools from Citywire Money

From the Forums

+ Start a new discussion

Weekly email from The Lolly

Get simple, easy ways to make more from your money. Just enter your email address below

An error occured while subscribing your email. Please try again later.

Thank you for registering for your weekly newsletter from The Lolly.

Keep an eye out for us in your inbox, and please add noreply@emails.citywire.co.uk to your safe senders list so we don't get junked.

Read more...

Investment Trust Watch: my Scottish tip for 2017

by Gavin Lumsden on Dec 09, 2016 at 16:10

Sorry, this link is not
quite ready yet