By Kit Rees and Sudip Kar-Gupta
LONDON (Reuters) – Britain’s top share index gained ground on Friday, led by mining shares trading higher on the back of a weaker dollar.
Trading was choppy before a U.S. jobs report later in the day. The report is expected to show U.S. employment growth slowed in January, undercutting the case for a further rise in U.S. interest rates in March.
Shares in British mining companies rose as the dollar weakened before the U.S. jobs report, making dollar-denominated commodities such as oil and metals more affordable for holders of other currencies.
Anglo American (AAL.L) rose almost 9 percent, adding to its 19.9 percent leap on Thursday. It was joined by fellow miner Glencore (GLEN.L), which rose 3.6 percent.
“It may just be a short-term bounce-back because, until we see fundamental changes in demand and serious uplift in economic growth forecasts and better data from China, I doubt this is sustainable,” said Ian Forrest, investment research analyst at The Share Centre.
Also in the commodities space, gas producer BG Group (BG.L), which is set to become part of Shell later in February, advanced 1 percent after its earnings beat expectations, reporting a 22 percent fall in earnings in the fourth quarter.
Banks also rallied, with Standard Chartered (STAN.L), Royal Bank of Scotland (RBS.L) and HSBC Holdings (HSBA.L) up 0.7 to 4.1 percent, with investors citing the prospect of a delayed interest rate hike for the UK being priced in to the market.
The blue-chip FTSE 100 index (.FTSE) was up 0.2 percent at 5,907.32 points at 1134 GMT, in line with the broader European market.
“The FTSE is looking steady, and appears to have found support to move away from the lows of the previous month,” said Jonathan Roy at Charles Hanover Investments.
However, shares in financial spread-betting company CMC Markets (CMCX.L) slipped below the company’s flotation price after it listed on the London stock market with a valuation of 691 million pounds ($ 1 billion).
The FTSE remains down by around 5 percent since the start of 2016 and nearly 20 percent below a record high reached in April 2015. A slowdown in China – the world’s second biggest economy – and weak oil prices has hit world stock markets.
“The violent swings in the oil markets, combined with ongoing concerns about the global economy, have reinstated a wave of risk aversion which continues to punish the FTSE 100,” said FXTM research analyst Lukman Otunuga.
(Editing by Hugh Lawson)
