Miners lead the way on Chinese boost

MINERS led the Footsie higher yesterday after economic data from China hit a five-month high, easing fears over a slowdown in demand for metals.

The FTSE 100 index climbed 59.41 points or 1.1 per cent to close at 5,548.06, having touched 5,552.79 during afternoon trade.

Financial stocks were also in demand as investors began digesting details of the European Union’s plans to recapitalise the continent’s lenders.

Ahead of the key eurozone meeting tomorrow, John Douthwaite – chief executive at Simply Stockbroking – said: “The market is crying out for some good news, but this is tempered by caution as another false dawn would be a disaster.”

The pound was down against the euro at €1.15 after the single currency was boosted by optimism about the rescue package. But sterling was up at $1.60 against the dollar.

Markets were boosted by a strong opening from the Dow Jones industrial average in the US, which was up nearly 1 per cent by the time London closed, boosted by the better-than-expected Chinese economic data.

Among the miners, copper giant Antofagasta up more than 7 per cent or 82p at 1,178p as the price of the precious metal surged. Kazakhmys was up 68.5p at 925p, while Lonmin was ahead 79p at 1,112p and Rio Tinto was up 222.5p at 3,373.5p.

Glasgow-based engineering giant Weir Group – which makes equipment used by miners – benefited from the surge in metal prices, with its shares rising 4 per cent or 70p to 1,843p.

Banks were also among the biggest risers, with Lloyds Banking Group up 5 per cent or 1.7p at 34.6p, while Royal Bank of Scotland rose by 0.5p at 25p and HSBC gained 12p at 530p.

Bleak data showing that manufacturing and services sectors in the eurozone saw their biggest decline in October since July 2009 failed to dent hope that politicians would hammer out a rescue package.

The Markit eurozone composite output index, where a reading below 50 indicates contraction, dropped to 47.2 from 49.1 in September, with signs of both the French and German economies slowing down.

The oil and gas sector was down ahead of results from BP, BG Group and Shell.

A note from Nomura said oil companies were set to continue to outperform the market after benefiting from high oil prices, but Shell fell 11p at 2,303p, while BP was down 1.3p at 438.1p and BG dropped 27.5p to 1,327p. Edinburgh-based explorer Cairn Energy, which is drilling off Greenland, rose 3.7p to 299.5p.

Meanwhile, prisons and security group G4S rallied despite a governance body that advises 1,700 large investors expressing concern about the risks of its “monster” £5.2 billion takeover deal for Danish cleaning and services firm ISS.

Advisory group Institutional Shareholder Services said the acquisition is a departure from the strategy set out by G4S’s chief executive, Nick Buckles. Shares were up 1.2p at 243.5p.

Outside the top flight, shares in own-label household goods maker McBride were up 8 per cent after the company said revenues rose by 2 per cent in the three months to 23 October, despite having to fight off strong promotions from branded rivals. Shares rose 9.5p to 126.8p.