Britain’s leading share index ended higher yesterday, buoyed by results from industrial equipment hire group Ashtead and by opening gains on Wall Street.
The FTSE 100 closed up at 24.77 points, or 0.4 per cent, at 6,083.31, broadly in line with European indexes and Wall Street. Stocks were more upbeat as investors bet that the US Federal Reserve might delay a much-anticipated rate hike and took comfort from the latest Chinese moves to calm volatile markets.
The blue chip index drew support from gains in mining companies as the price of copper rebounded, although an eight per cent drop in Glencore shares demonstrated continued volatility.
Traders cited uncertainty over possible equity issuance and the outlook in China as fuelling short bets on the stock, which fell to an all-time low.
“Even the China-exposed names, such as miners, we think have fallen too far. Much of the negative news is priced in as the PMI data was not a surprise and we were expecting a weak print,” Atif Latif, director of trading at Guardian Stockbrokers, said.
Ashtead, the biggest gainer, was up 7.8 per cent after posting a first-quarter profit rise helped by a rebound in US construction markets.
“Progress in the quarter is thanks to strong execution and a strategy of geographical and sector diversification… as well as a seasonal improvement in demand following a weather-impacted spring,” Mike van Dulken, head of research at Accendo Markets, said in a note.
Pharmaceutical company Hikma was also among the biggest gainers, up 4.5 per cent after an upgrade by Barclays.
Among mid-caps, the car-parts-to-bikes retailer Halfords fell 8.6 per cent after a recent boom in bicycle sales dropped off sharply in its second quarter due to wet August weather and increased discounting in the market.
Oil stocks were also down as the price of Brent crude continued to retreat from highs set on Monday. Shell fell 1.8 per cent, BP was down 1.4 per cent and BG dropped 1.2 per cent.
Premier Oil fell 6.5 per cent, Ophir Energy was down 5.5 per cent, and Tullow Oil dropped 3.2 per cent.
Engineering company Diploma was the second heaviest mid-cap loser, down 7.8 per cent, because currency hedging contracts set to expire next year will be replaced by more expensive ones, hitting the next financial year’s operations.