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Thursday, August 11, 2022

Britain’s FTSE bounces off lows after mining sector turnaround

* FTSE 100 up 0.3 percent

* Miners reverse on stimulus bets after weak China data

* esure falls sharply after results miss consensus (Updates with closing prices)

By Alistair Smout and Liisa Tuhkanen

LONDON, Aug 10 (Reuters) – Britain’s top share index recouped early losses on Monday, following a sharp reversal in major mining stocks, which turned higher on hopes of stimulus after weak data in China.

The blue-chip FTSE 100 index was up 17.73 points, or 0.3 percent, at 6,736.22 points by the close, turning higher after gains in early trade on Wall Street.

The index is up 2.6 percent since the start of 2015 but is over 5 percent below an April record high of 7,122.74 points.

Miners, which account for around a 10th of the FTSE 100 in terms of market capitalisation, recouped early losses to finish among top gainers. While weak China data had hit copper, mired at a six-year low, it rallied on hopes that it may prompt further stimulus from Chinese authorities.

Jeremy Batstone-Carr, market analyst at Charles Stanley (LSE: CAY.L – news) , remained cautious on the mining sector, and said that weak data may result in China devaluing its currency.

“The pressure is rising on China to devalue … which would support China’s equity but not help metal prices or UK-listed miners,” he said.

Oil stocks were some of the most heavyweight fallers, trimming 5 points off the index as the poor China data also sent Brent crude to a six month low, before rebounding slightly.

Among mid caps, insurance company esure dropped 9.6 percent after its interim results marginally missed analysts’ consensus forecast, hit by weakness in its motor insurance business.

“The company posted a massive 81 percent drop in trading profit from its motor insurance arm, decidedly offsetting a rise in premiums in other areas of the business,” Augustin Eden, analyst at Accendo Markets, said in a note. (Editing by Alison Williams)

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