London Report: Chinese factory figures see FTSE shares edge up

BRITAIN’S top share index inched higher yesterday as upbeat Chinese factory data lifted mining stocks and as homebuilders shrugged off worse-than-expected mortgage approval figures in the UK.

The blue-chip FTSE 100 index closed up 0.3 per cent, or 19.59 points, at 6,864.10 points.

Mining stocks across Europe, including London-listed Rio Tinto and BHP Billiton, rose after data showed that Chinese factory activity expanded at its fastest pace in five months in May.

Mining stocks are particularly sensitive to the state of the economy in the world’s biggest metals consumer. The sector fell on Friday on concerns about a possible economic slowdown there.

“Given that the [mining] sector has been pretty unloved recently, relating to ongoing concerns regarding Chinese growth, any bit of positive news on China will help,” HSBC equity strategist Robert Parkes said.

The FTSE 350 Mining Index – which fell 16 per cent in 2013 – was up 1.6 per cent yesterday.

Homebuilder Barratt Developments also outperformed, rising 1.2 per cent, after Goldman Sachs upgraded the stock to buy from neutral.

Other property stocks such as Persimmon and Hammerson also rose despite the news that British mortgage approvals fell more than expected in April to their lowest level in nine months.

Beverage-bottling stocks Coca-Cola HBC and Rexam were up 3.4 per cent and 2.1 per cent respectively, with traders saying investors were coming back to the former after a 20 per cent drop in its share price year-to-date and to the latter after a £450m cash return.

Pharma giant Astrazeneca, whose shares have lost ground over the last month after US rival Pfizer walked away from its bid, saw its shares rise two per cent after the company got positive data for two of its products.

On the downside, shares of insurer Standard Life fell 1.7 per cent after media reports said a move to a collective pensions system would be formally put on Britain’s legislative agenda later this week.

“The thinking is that the government will introduce collective pensions, as they have in the Netherlands, whereby pensions’ money is pooled and this brings charges down,” Sanford C Bernstein analyst Edward Houghton said.

“Ultimately, people are thinking margins are coming down on pensions.”