The FTSE 100 was firmly up in early deals this morning, as it was lifted by headline natural resources shares on the back of a rebound in Chinese growth.
The Chinese economy expanded by 7.9 per cent in the fourth quarter, coming in above expectations and marking an uptick from the 7.4 per cent recorded in the third quarter.
Steelmaker Evraz added 1.4 per cent in early deals, despite this morning reporting a five per cent annual drop in steel output.
Miner Rio Tinto was up 1.3 per cent. Yesterday, its chief executive Tom Albanese stepped down following a $14bn write-down on two recent acquisitions.
However, it was engineer Meggitt that led a rebounding FTSE 100 in early deals, following an upgrade from Barclays Capital. It rose 1.67 per cent.
Elsewhere, blue chip Associated British Foods added 1.56 per cent as it was buoyed by yesterday’s trading statement. The group, which owns budget retailer Primark, said revenue was 10 per cent ahead of last year.
Leading the FTSE 100 back down was a mixed bag of companies including consumer packaging group Rexam, which fell 1.48 per cent, and financial stocks Royal Bank of Scotland and Experian, dropping 1.33 per cent and 1.2 per cent respectively.
On the wider index Home Retail, which includes the Argos and Homebase brands, dropped 2.27 per cent after soaring yesterday.
Aside from RBS, which had a tough morning, banking shares were broadly flat. HSBC was up 0.01 per cent in early deals, Barclays rose 0.08 per cent and Lloyds Banking Group was up 0.16 per cent.
In Asia, Japan’s Nikkei closed up 2.86 per cent and Hong Kong’s Hang Seng was up 1.12 per cent. In the US, the Dow Jones closed up 0.63 per cent.