WEDNESDAY MARKET CLOSE: Chinese growth gives market a lift

Surprisingly strong economic data at home and aboard helped the London market end the day in positive territory as investors shrugged off a continued slide in profits at Tesco.

The supermarket giant posted a 6 per cent drop in full-year trading profits to £3.3 billion, its second consecutive decline in annual earnings, but the fall was not as bad as the City had feared and shares closed up 7.5p, or 2.6 per cent, at 293.8p.

Sentiment was also boosted by the release of UK unemployment figures, which showed the jobless rate dropped to 6.9 per cent for the three months to February, down from 7.2 per cent in the previous quarter and below forecasts of 7.1 per cent.

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Better-than-expected growth figures from China, where the economy expanded by 7.4 per cent in the January-March quarter, also lifted the mood in London and the FTSE 100 added 42.56 points to end the session at 6,584.17.

Brenda Kelly, chief market strategist at IG, said: “Although the GDP figure was below the previous quarter’s, and industrial production was still weak, the raw materials sector was comforted by the thought that the downward momentum in Chinese figures has come to an end.”

Defensive sectors were in favour and drugs giant GlaxoSmithKline, which is already facing corruption allegations in China, Iraq and Poland, added 16.5p to 1,563.5p, despite revealing it was also probing bribery claims in Jordan and Lebanon.

However, defence contractor BAE Systems was the biggest faller in the top-flight index as it went ex-dividend. Shares in the group dropped 15.9p, or almost 4.1 per cent, to 376p.

JD Sports continued to feel the benefits of Tuesday’s strong results, crossing the finishing line up 108p, or 6.8 per cent, at 1,708p.