FTSE 100 close: Anglo American and Antofagasta receive China boost but Barratt drops after house price slide
London’s FTSE 100 sprung higher today, propelled by investors piling into commodity giants after a batch of better than expected data indicated the Chinese economy is on the mend.
The capital’s premier index flung 0.49 per cent higher to back above the 7,900 point mark, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, fell 0.16 per cent to nearly to 19,870.60 points.
Fresh numbers released overnight revealed China’s manufacturing sector has returned to growth and is recovering much faster than analysts had expected, fuelling hopes that the globe’s second largest economy’s resurgence will lift the rest of the world.
‘’March winds of hope are blowing through markets that China’s reopening will offset weakness in other countries which are beset with stubborn inflation and a worsening cost of living crisis,” Susannah Streeter, head of money and markets at Hargreaves Lansdown, said.
FTSE 100 is still lower over last week despite today’s gains
The Caixin manufacturing purchasing managers’ index climbed to 51.6, smashing the consensus forecast of 50.2 and putting China’s factory output firmly above the 50 point threshold that separates growth and contraction.
FTSE 100 miners soared on the news, with Anglo American and Antofagasta trading at the top of the index, each adding more than three per cent.
China is an enormous consumer of commodities, meaning its reintegration into the global economy should boost demand for inputs like copper and steel.
Housebuilders tempered gains on the premier index after building society Nationwide said house prices dropped at their quickest pace in a decade over the last year, down 1.1 per cent.
Barratt Developments anchored the FTSE 100, shedding more than four per cent, while Berkeley Group lost nearly two per cent.
Demand has been sucked out of the property market by the Bank of England’s ten successive interest rate rises squeezing affordability.
The pound was broadly flat against the US dollar. Oil prices were also pretty much unchanged.