UK stocks rose on Thursday, boosted by mining stocks after China’s latest pledge for more policy measures fuelled optimism for a turnaround in the world’s second largest economy, while a drop in oil-related stocks limited gains.
The blue-chip FTSE 100 gained 0.5% by 0720 GMT.
China will deploy “necessary fiscal spending” to meet an economic growth target of roughly 5%, leaders pledged, following a raft of aggressive central bank policy easing measures earlier in the week.
That followed a report that China is considering injecting up to 1 trillion yuan ($142.39 billion) of capital into its biggest state banks.
The moves signal renewed efforts to turnaround growth and demand in the world’s second largest economy.
UK stocks slipped on Wednesday as investors questioned whether the scope of China’s proposed measures were sufficient, but the newly-announced fiscal stimulus appeared to have soothed those concerns.
The index tracking industrial metal and mining companies jumped 4% as copper prices rallied.
However, an index of oil and gas stocks dropped 4%, as crude prices slumped over 2% following a report that Saudi Arabia is preparing to abandon its unofficial price target of $100 a barrel as it prepares to increase output.
Among single movers, shares of Watches of Switzerland jumped 4.7% after Deutsche Bank upgraded the stock to “buy” from hold and raised its price target. Burberry shares rose 6.5% on hopes of renewed demand in the Chinese market.
FTSE 100 drops over 1pc on strong retail sales
These moves also lifted the domestic-focused midcap index 0.8% and the personal goods index 5.7%. Investors eyed speeches from Federal Reserve officials later in the day, including Chair Jerome Powell, for more clues on US monetary policy.
Domestically, a survey from the British Retail Consortium survey showed British consumers have grown more gloomy over the past month following the new Labour government’s removal of a welfare benefit for pensioners and warning of tax rises at next month’s budget.
Source: Brecorder
