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FTSE resumes rise as China data lift miners and banks
by Gavin Lumsden on Oct 24, 2013 at 10:00
Markets bounced back from yesterday’s retreat after data showed an improvement in China’s manufacturing sector.
The FTSE 100 regained 13 points of yesterday’s 21 point fall to trade 0.2% up at 6,686 in response to to the flash Markit/HSBC purchasing managers index. The PMI survey showed China’s economy picking up after recent weakness with a score of 50.9 up from 50.2 in September. In such surveys 50 separates contraction from growth.
Although this is a preliminary reading and could change at the final count, the news bolstered sentiment and offset concerns over China’s banking sector and signs that authorities were tightening interest rates.
However, analysts at Nomura repeated their view that China’s ‘economic recovery is unsustainable as the government will tighten policy to address inflation, financial systemic risks and the pollution problem that has again made recent global headlines.’
Rolls-Royce (RR.L) led the UK blue chip rally, up 2% to £11.66, helped by news of a £22 million Samsung rig contract.
WPP (WPP.L) made a similar gain up 27p to £13.39 after the advertising agency beat third quarter forecasts.
But the eyecatcher was Sports Direct International (SPD.L) which slumped 5.8% to 672p as Goldman Sachs sold 16 million shares on behalf of Mike Ashley, the retailer’s founder. According to Reuters, Ashley owned 385 million shares, nearly two thirds of its capital in July.
Ophir Energy (OPHR.L) led mid caps on the FTSE 250, spiking 8.6% to 325p after confirming reports it was looking to sell stakes in oil fields in Tanzania.
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