TUESDAY MARKET CLOSE: Traders shrug off Chinese slowdown

Banking shares were on the front foot with Royal Bank of Scotland rising 11.5p. Picture: Michael Gillen
Banking shares were on the front foot with Royal Bank of Scotland rising 11.5p. Picture: Michael Gillen
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Weakening growth in China and a downgrade for the global economy from the International Monetary Fund failed to dent the London market amid hopes that the European Central Bank (ECB) will approve a round of bond-buying on Thursday.

Tony Cross, market analyst at Trustnet Direct, said: “The prospect of generous stimulus measures being unveiled by [ECB president] Mario Draghi in a couple of days’ time cheered London equities during much of the session.

“With little on the economic calendar ahead of Thursday’s anticipated ECB statement, unless we see some shock event occur then there may well be room for this air of optimism to prevail a little while longer.”

The FTSE 100 Index ended the day up 34.57 points at 6,620.1, despite figures showing the Chinese economy expanded at its slowest pace for more than two decades last year.

However, growth of 7.4 per cent was better than the City had pencilled in, and traders’ relief saw mining stocks make some of the biggest gains. Anglo-American added 32p, or 3 per cent, to 1,121.5p, while precious metals specialist Fresnillo jumped 35p, or 4 per cent, to end the session at 911p.

Banking shares were also on the front foot, with Royal Bank of Scotland rising 11.5p to close at 380.5p and Barclays gaining 5.25p to finish at 235.25p.

Elsewhere, results from consumer goods giant Unilever disappointed investors as fourth-quarter sales growth came in short of City hopes. Chief executive Paul Polman admitted that 2014 had been a tough year for the industry, adding that the group did not expect a significant improvement in market conditions this year, and shares in the maker of Bovril and Ben & Jerry’s fell 16p to 2,713p.

A trading update from bookmaker William Hill also received a poor reception, with shares dropping 18.3p, or 4.9 per cent, to 358.3p.