London’s FTSE 100 bumped upwards again today, boosted by stronger than expected Chinese economic growth boosting sentiment toward the capital’s biggest listed industrial giants.
The capital’s premier index climbed 0.38 per cent to 7,909.43 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, was broadly unchanged at 19,296.32 points.
Miners have been on a tear of late, mainly driven by investors pouring into the sector on intensifying expectations that China’s economic reopening from tough Covid-19 measures will charge demand for commodities.
Numbers out this morning revealed the world’s second largest economy grew 4.5 per cent in the first quarter of this year, much better than analysts’ forecasts, raising hopes that spending on things like coal and nickel will rage this year.
China is a huge consumer of commodities, so any economic over performance should jack up the revenues of the FTSE 100’s largest industrial companies.
Miners Antofagasta, Anglo American, Glencore and Fresnillo all shot to the top of the premier index, notching gains of more than 1.9 per cent.
“The FTSE 100… opened higher for the eighth consecutive session, trading above 7,900 with miners like Fresnillo, Antofagasta, Anglo American and Glencore outperforming,” Victoria Scholar, head of investment at interactive investor, said.
“Basic resources are enjoying a tailwind from China’s strong first quarter GDP figure which hit 4.5 per cent, beating expectations for four per cent thanks to the release of pent-up demand after Beijing unwound its strict covid lockdown measures late last year,” she added.
Banks also lifted the FTSE 100 higher, likely on investors ramping up bets on the Bank of England forcing through a twelfth straight interest rate increase on 11 May after the Office for National Statistics today said wage growth topped expectations in the three months to February.
Higher borrowing costs often hoist lenders’ bottom lines as they allow them to charge more for loans.
NatWest gained about one per cent, while Barclays and Lloyds Bank climbed a similar amount.
On Wall Street, investment banking titan Goldman Sachs profits undershot forecasts, crimped by the sluggish deal making environment, pushing its share price nearly two per cent lower during opening exchanges in the US.
The pound notched strong gains against the US dollar, strengthening around 0.4 per cent.
Oil prices were pretty much unchanged.