FTSE lifted by mining stocks but gains eroded by US economic data
BRITAIN’S top shares posted modest gains yesterday, helped by strength in heavyweight mining stocks after data showed China’s manufactur-ing sector expanded for the first time in over a year.
But strong earlier gains were eroded in the afternoon after disappointing US manufacturing data raised concerns over the health of the world’s biggest economy just as politicians haggle over how to avoid the “fiscal cliff” at the end of the year.
The FTSE 100 closed up 4.42 points, or 0.1 per cent, at 5,871.24 points, having run back from an early session peak just above the psychologically important 5,900 level.
“Goodbye Santa Rally for now, as poor US data mixed with the persistent worries about the fiscal cliff which remains unresolved,” said Ishaq Siddiqi, market strategist at ETX Capital.
“Traders are taking a prudent approach here now, as major upcoming data in the US this week such as the key monthly jobs report may likely disappoint,”
Volumes were very thin at just 44 per cent of the 90-day daily average on the first session of the final month of 2013.
Stocks seen as defensive attracted the most interest, with drugmakers and tobacco the two best performing sectors.
Gains in miners helped as the sector benefited along with the copper price on hopes for improved demand from China, the world’s top metals consumer.
British manufacturing activity also shrank much less than expected in November, although the sector remains in a precarious state as new orders edged down.