Wednesday market close: Rally continues on Asian stimulus

Shares in London rallied for the third session in a row as investors cheered efforts to boost the economies of China and Japan.

London shares rallied for a third session

Following the best one-day gain for Japan’s Nikkei 225 index since October 2008, sparked by prime minister Shinzo Abe’s hints of lower corporate taxes, the FTSE 100 jumped 82.91 points to 6,229.01.

Hopes of further stimulus in China helped the mood in London, although early gains slipped slightly in afternoon trading after data showed a record rise in US job openings, suggesting wage pressure could start to build and sway the Federal Reserve towards a rate hike.

Tony Cross, market analyst at Trustnet Direct, said: “If conviction builds further here then even talk of renewed stimulus measures from Beijing will do little to placate a market that’s worried about the wider global consequences of higher borrowing costs in the US.”

Miners were among those leading the rally on hopes of increased demand as China bolsters its economic support, with Anglo American rising 39p or 5.5 per cent to 742.9p, also helped by a deal to sell its platinum operations in South Africa.

Financial stocks were likewise among those benefiting from the rebound, in particular those with a heavy focus on Asia, such as insurer Prudential, up 3.1 per cent or 42.5p at 1,428p, while banking giant Standard Chartered gained 22.8p to 744p.

Fashion group Burberry, which generates a large chunk of its revenues in China, rose 18p to 1,398p, but retailer Laura Ashley was flat at 27.75p after suffering a difficult first half for its overseas business.

Elsewhere, Barratt added 1p to finish the day at 638p. The housebuilder reported a 45 per cent surge in annual pre-tax profits to £565.5 million on the back of continued strong demand for new homes.