Wednesday market close: Market surges in spite of China data

British Airways owner IAG climbed almost 5 per cent. Picture: GettyBritish Airways owner IAG climbed almost 5 per cent. Picture: Getty
British Airways owner IAG climbed almost 5 per cent. Picture: Getty
Airlines lifted the FTSE 100 index higher as it gained ground after a dramatic sell-off in the previous session and despite more poor economic news from China.

British Airways owner International Airlines Group (IAG) led the risers’ board as it climbed almost 5 per cent on a positive broker note, with low-cost rival easyJet also strongly ahead.

The wider top-flight index rose 96.4 points to 6,032.24, or nearly 2 per cent, with virtually all stocks rising. It had tumbled nearly 3% on Tuesday to take it below the 6,000-mark.

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The recovery in London session came in spite of a closely watched activity index for China’s manufacturing sector slumping to its lowest level in six and a half years, which prompted falls in Asian markets overnight.

Tony Cross, market analyst for Trustnet Direct, said:

“London’s comparative outperformance to other markets is in part due to the sustained weakness we’ve seen for the Pound, driven largely by technical indicators. Value for overseas buyers improves, whilst exporters are also seeing some cause for cheer here, too.”

In London shares, IAG was boosted by a note from Morgan Stanley lifting its target price and upgrading its earnings forecast after brokers assessed the impacts of falling oil prices, currency movements and its acquisition of Aer Lingus.

The stock added 27p to 594p while easyJet rose more than 3 per cemt, or 59p, at 1759p.

Meanwhile miners made gains after being heavily hit in the previous session, led by Glencore - up almost 3 per cent, or 2.8p, to 109.1p.

Engineer Smiths Group was also in favour, up 10p to 1,039p after it said better margins helped its profit to edge higher in the year to the end of July, despite revenue falling.

Platinum metals company Johnson Matthey, the world’s largest supplier of vehicle catalytic converters, recovered after being hit by the escalating Volkswagen scandal. Shares climbed 60p to 2,378p.