MARKET CLOSE: Hopes for Chinese boost aid market

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SENTIMENT was lifted on the London market as investors were given the chance to react to remarks from US Federal Reserve chair Janet Yellen acknowledging the danger that raising interest rates too soon could cause the economy to stall.

There was also a boost from hopes for more economic stimulus measures in China, boosting shares in commodities shares and helping the FTSE 100 index add 36.4 points to close at 6,891.43.

The London Stock Exchange building. Picture: Getty

The London Stock Exchange building. Picture: Getty

Tony Cross, market analyst at Trustnet Direct, said: “The big story remains positive signs of intervention in the Chinese economy by Beijing so heavyweight natural resources stocks are looking generally upbeat.”

Banks were untroubled by details published by the Bank of England about its new stress test later this year which will calculate the impact of a global crisis scenario.

The new test envisaged a slowdown in China and a eurozone slump but slightly less difficult conditions in the UK economy than the last one.

It was widely expected before the details were unveiled that lenders with a more international focus such as Standard Chartered and HSBC would face a tougher time under the new scenario.

But both reacted positively to the plans, with Standard Chartered up 17p to 1,120p and HSBC adding 4.8p to 583.3p.

Commodities stocks were boosted by hopes for stimulus in China, with Antofagasta topping the risers’ board as it added 3 per cent, or 24.5p, to 739.5p.

Anglo American rose 16p to 1,060p and Glencore by 3.7p to 291.8p.

The collapse of a deal by B&Q owner Kingfisher to buy France’s Mr Bricolage was also cheered by traders as shares rose 2 per cent, or 7p, to 364.8p.