FTSE edges higher as mining stocks outperform
British equities advanced on Monday as investors took heart from comments on Chinese stock market stability and encouraging macroeconomic data there, sending shares in British mining companies higher.
Britain’s FTSE 100 index rose 0.6 percent to 6,176.75 points by 0939 GMT, slightly underperforming the broader European market.
Assurance from a top securities regulator that China will not reintroduce a circuit breaker mechanism to its stock market in the next few years cheered investors, as did the bright spots in generally weaker Chinese data.
These positive signs from the world’s biggest consumer of copper and iron ore lent a steadying hand to the price of copper, which stabilised below four-month highs. [MET/L]
The British mining sector rallied, gaining 2.5 percent as miners Glencore, Anglo American, BHP Billiton, Antofagasta and Rio Tinto rose 1.6 to 5 percent.
Oil stocks, however, were flat as oil prices fell on persistent oversupply worries. [O/R]
“Oil prices are lower today, but I think there’s a rising belief that we’ve seen a bottom in oil … and I think not only oil but commodities in general seem to have turned a corner,” Jasper Lawler, market analyst at CMC Markets, said.
Shares in South Africa-facing insurance company Old Mutual rose 1.5 percent on a price target upgrade from investment bank Barclays, citing the company’s full year results and good operational momentum.
However among the fallers, car insurance provider Admiral Group fell over 2 percent after HSBC cut its rating on the stock to “hold” from “buy” on valuation grounds.
HSBC also downgraded its rating on British mid-cap Stagecoach Group on concerns about weakness in the rail industry. Shares in the public transport company dropped 5.3 percent.