British equities hit one-week high as China pledges boost sentiment
Reuters
Published Jan 24, 2024 08:42
Updated Jan 24, 2024 17:20
By Sruthi Shankar and Khushi Singh
(Reuters) -British equities touched a one-week high on Wednesday, bolstered by China-exposed stocks following measures taken by the Chinese central bank to support the economy, while sterling rallied after a survey hinted at high-for-longer interest rates.
The exporter-heavy FTSE 100 ended 0.6% higher, while the domestically oriented FTSE 250 index added 0.9%.
Industrial metal miners rose 2.6% after China's central bank announced a 50 basis points cut in the amount of cash that banks must hold as reserves from Feb. 5, in an attempt to shore up a fragile economic recovery.
Miners Antofagasta (LON:ANTO), Glencore (LON:GLEN) and Anglo American (JO:AGLJ) climbed between 3% and 5.3%, leading gains on the FTSE 100.
"Today has seen prices edge higher on hopes that the new measures announced by China will provide an uplift on the demand side, although the fact that they are due to arrive just before Chinese New Year could mean that the pickup in demand might be delayed several weeks," said Michael Hewson, chief market analyst at CMC Markets UK.
Asia-exposed insurer Prudential (LON:PRU) was up 2.2%, while luxury retailer Burberry added 3.7%, lifting the personal goods index 2.5% on hopes of a demand refresh from China.
Precious metal miners surged 4.7%, supported by positive news about all of its constituent companies.
Endeavour Mining jumped 4.4% and Centamin (LON:CEY) gained 5.2% after Liberum upgraded their shares to "buy", saying gold equities will shine this year amid global war and trade tensions if Donald Trump wins the U.S. presidential race in November.
In addition, gold miners Fresnillo Plc (LON:FRES) climbed 4.2% and Hochschild Mining (LON:HOCM) moved up 7.5% following strong production numbers.
Meanwhile, the pound rose after a survey showed Britain's economy started 2024 on a stronger footing, prompting investors to reduce their bets on the Bank of England moving quickly to cut interest rates.
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Among individual stocks, pest control company Rentokil was the top decliner on FTSE 100, down 2.3%, after BofA Global Research downgraded the stock.
Tullow Oil (LON:TLW) was among the top gainers on FTSE 250 with a 10.7% rise on guidance for strong cash flow over the next two years.
Written By: Reuters
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