Global rally puts FTSE 100 on track for biggest daily gain in two months

The FTSE 100 bounced 1 per cent by 0820 GMT. — Reuters pic
The FTSE 100 bounced 1 per cent by 0820 GMT. — Reuters pic

LONDON, April 1 — Gains in miners and banks today placed London’s main bourse on course for its biggest daily increase in two months, as sentiment picked up after surprisingly upbeat data from China and progress in US-Sino trade talks.

The FTSE 100 bounced 1 per cent by 0820 GMT, which if sustained would represent its best one-day rise since Feb. 5, and midcaps were 0.7 per cent higher.

UK markets joined a global rally triggered by data showing Chinese factory activity grew for the first time in four months in March, as well as hopes of a resolution to a prolonged trade dispute between Washington and Beijing.

Further driving sentiment was a survey that showed UK manufacturing growth at an unexpected 13-month high last month as the country stockpiles for Brexit.

Miners jumped 2 per cent to a 10-month high as base metals prices rose, including nickel after data suggested stimulus measures in China, the world’s biggest nickel consumer, were boosting the economy.

Trade progress and reassurance about the Chinese economy also helped Asia-exposed stocks such as HSBC and luxury brand Burberry.

“The trade deal is going very well,” U.S. President Donald Trump had said on Friday, with talks between the world’s two largest economies set to resume this week.

However the Brexit conundrum continued, with parliament set to vote on different options. The default remains for the UK to fall out of the European Union without a deal on April 12.

All but one sector in the FTSE 100 were in positive territory, with easyJet’s weak trading update the biggest negative.

Cautious tone

WPP, the world’s biggest advertising group, lead gains after a Deutsche Bank rating upgrade, up 4 per cent and on course for its best day in a month.

EasyJet by contrast suffered a 7 per cent slump after it flagged soft ticket pricing, partly due to Brexit uncertainties.

EasyJet’s cautious tone brought down shares in British Airways-owner IAG, Wizz Air and the London-listed shares of Ryanair by between 2 and 5.3 per cent.

Struggling retailer Debenhams also slumped 7 per cent after sportswear group Sports Direct said other shareholders in the department store group expressed support for appointing Mike Ashley as CEO.

Among midcaps, Royal Mail added 3 per cent after brokerage Berenberg upgraded the stock to “hold”.

Iron ore pellet producer Ferrexpo rose 4 per cent as higher iron ore prices took precedence over the company delaying annual results again, with charity investigation continuing.

Babcock edged 3.3 per cent higher after a media report that Rolls-Royce director and former Shell executive Ruth Cairnie would take over as chairman of the defence contractor. — Reuters

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