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London open: Miners give stocks a boost amid China stimulus hopes
UK stocks gained on Monday, led by mining companies as soft Chinese data raised hopes of further stimulus measures.
BHP Billiton, Rio Tinto and Anglo American were the top risers on the FTSE 100 in morning trade, albeit declines in gold and silver prices, as copper prices jumped 2.24%.
“There is also perhaps optimism that soft China business sentiment will result in more stimulus from Beijing and that the nation’s new securities regulator will grease the wheels of the IPO market and get Chinese equities further from their recent lows, recovering lost ground not just this year, but since last summer,” said Mike van Dulken, head of research at Accendo Markets.
The MNI China Business Sentiment Indicator fell for the second consecutive month to 49.9 in February from 52.3 in January as production dropped to a two-year low.
In another lift to markets, oil prices rallied with Brent crude rising 2.3% to $33.79 per barrel and West Texas Intermediate increased 2.7% to $32.64 per barrel at 0901 GMT.
Meanwhile, London Mayor Boris Johnson’s surprise decision to back the campaign for Britain to leave the European Union sent the pound lower. The pound plunged 1.55% against the US dollar and fell 1.21% against the euro at 0903 GMT.
“As the most recognisable Tory bar the PM himself, Johnson’s freshly revealed, and long-gestated, position immeasurably complicates matters for Cameron, the relatively off-putting out-campaign cabal of Ian Duncan Smith, Michael Gove and Nigel Farage gifted a media-friendly mascot in the shape of ol’ Boris,” said Connor Campbell, financial analyst at Spreadex.
In company news, HSBC’s shares dipped after reporting full year profit that missed forecasts and predicted a “bumpier financial environment” ahead due to a slowdown in China.
Home Retail advanced following media reports over the weekend that Sainsbury’s could seek an extension to the Takeover Panel’s 18 March deadline, after South African retailer Steinhoff made an offer to the Argos owner.
Bovis Homes edged higher after reporting a jump in full year pre-tax profit and revenue as legal completions and prices rose and the housebuilder sounded an upbeat note on 2016.
Primark owner Associated British Foods climbed as it said full year profits will be better than expected, supported by the recent weakening of sterling.
