London markets closed higher at the start of an important week, as positive figures out from China over the weekend boosted sentiment.
The FTSE 100 ended 0.25 per cent higher, trading at 7,496.87 while the mid-cap FTSE 250, which is more aligned with the health of the domestic economy, rose 0.32 per cent to trade at 18,522.10.
A return to inflation will be welcomed by policymakers in the Chinese communist party, who are attempting to reignite growth in its stumbling economy.
Economists at Capital Economics expect inflation to “rebound further over the coming months, as policy support drives a modest recovery in China’s economic momentum.”
The news provided a boost to many of the FTSE’s natural resource giants. China is an important market for minerals.
Fresnillo topped the index, climbing 4.8 per cent. Rio Tinto rose 3.7 per cent and Antofagasta 3.1 per cent. Glencore and Anglo American also saw strong gains.
Susannah Streeter, head of money and markets, Hargreaves Lansdown said miners were “leading the pack amid hopes that China’s economic troubles could be dissipating”.
Shares in FTSE 250-listed Vistry soared after it unveiled plans to merge its housebuilding division with its affordable homes business. It was trading over 12 per cent higher.
Boss Greg Fitzgerald said “focusing the group’s operations fully on partnerships by merging our housebuilding operations with our Partnerships business best enables sustained growth in housing output, provides greater benefits to our partners, while maximising value and long-term returns for shareholders.”
The announcement came despite a 8.4 per cent fall in underlying pretax profit, which was hit thanks to faltering demand.
Fellow housebuilders Persimmon, Barratt Developments and Taylor Wimpey all performed well, rising 1.9 per cent, 1.3 per cent and 1.8 per cent respectively.
Markets will have a lot to keep an eye on this week with the latest batch of US inflation data due out on Wednesday before the European Central Bank make their latest interest rate decision a day later.