Mining stocks led the London market higher yesterday as China signalled an era of lower interest rates is coming for the first time in 14 years.
Rio Tinto rose 3.8 per cent, or 189p, to 5113p, Anglo American advanced 2.7 per cent, or 66.5p, to 2531p, Glencore gained 4.5 per cent, or 16.85p, to 394.85p and Antofagasta closed 4.9 per cent, or 85p, higher at 1815.5p – all on hopes stronger economic growth in China will boost demand for raw materials such as iron ore and copper.
The rally in the heavyweight mining sector helped push the FTSE 100 up 0.5 per cent, or 43.47 points, to 8352.08 even as investors grappled with fresh turmoil in the Middle East following the fall of Syrian president Bashar al-Assad.
The FTSE 250 inched down 0.05 per cent, or 9.73 points, to 21049.27.
While regime change in Syria reverberated around the world, it was developments in China that gave markets direction.
With the world’s second largest economy in need of a boost, Beijing said it will ‘implement more proactive fiscal policies and moderately loose monetary policies’ from next year.
Boost: Rio Tinto rose 3.8%, Anglo American rose 2.7%, Glencore gained 4.5% and Antofagasta rose 4.9% on hopes economic growth in China will boost demand for raw materials
It was the first time China has signalled ‘loose’ monetary policy – or lower interest rates – since 2010 when it was looking to support a recovery from the global financial crisis.
‘We must vigorously boost consumption, improve investment efficiency, and comprehensively expand domestic demand,’ state news agency Xinhua quoted officials as saying.
The prospect of an economic recovery in China – combined with uncertainty in the Middle East – also pushed the oil price higher ,with Brent crude rising more than 1 per cent towards $72 a barrel.
Other London-listed stocks exposed to China made gains, Prudential gained 2.9 per cent, or 19.2p, to 681.4p, Standard Chartered added 1.6 per cent, or 15.6p, to 989.2p and Burberry rose 4.3 per cent, or 40.2p, to 970p.
Burberry also got a lift from analysts at RBC Capital Markets who said the outlook for luxury goods is improving following a torrid few years.
Premier Inn owner Whitbread slipped 2.6 per cent, or 77p, to 2911p after UBS cut the target price on the company to 4200p from 4400p.
IP Group surged 3.6 per cent, or 1.75p, to 49.95p after the investment firm agreed to sell stakes in nine of its companies to fund manager Lexham Partners for £15million.
Domino’s Pizza Group revealed it is facing a hit of about £3million a year from the increase in employers’ National Insurance Contributions and further rise the national minimum wage.
It came as the firm unveiled plans to grow to 1,600 stores delivering £2billion of sales by 2028, and 2,000 stores delivering £2.5billion of sales by 2033. It has more than 1,350 stores in the UK and Ireland. Shares lost 3.4 per cent, or 12p, to 340p.
Shares in glasses maker Inspecs tumbled after it warned subdued demand will hit profits.
The group expects earnings of around £17.4million to £17.9million on sales of about £197million for 2024. Last year, it reported sales of £203.3million and earnings of £18million. Shares slumped 10.3 per cent, or 5p, to 43.5p.
Stock watch – Synectics
Shares in Synectics rallied after it said profits for the year would be ‘materially ahead’ of City expectations.
The security and surveillance group, whose CCTV cameras are used by everyone from casinos to councils, hailed ‘continued momentum’ in the second half of its financial year.
Revenues and profits for the 12 months to the end of November will be better than the £55.4million and £3.9miliion pencilled in by analysts. Shares surged 12.3 per cent, or 38p, to 347p.
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