FTSE 100 buoyed by mining gains amid China reopening speculation
The FTSE 100 closed the day up 2.03%, or 146.21 points, at 7,334.84.
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Your support makes all the difference.European stocks enjoyed a boost on Friday, closing the week on a high amid reports that China is mulling over reopening its economy.
The FTSE 100 surged by more than 2.5% at one point on Friday as investors piled cash into the index’s China-exposed mining giants.
Shares in Anglo American moved more than 10% higher amid the rumours that the Chinese government was looking into an end to its zero-Covid policy and a path to reopening.
Meanwhile, Endeavour Mining, Rio Tinto and Antofagasta all made gains above 5%.
The FTSE 100 closed the day up 2.03%, or 146.21 points, at 7,334.84.
Analysts questioned the likelihood of the economy reopening as it approaches the colder winter months, which previously have seen bigger outbreaks of Covid.
As we head into the winter months it seems highly improbable that China would be able to reopen its economy in any meaningful or sustainable way
Michael Hewson, chief market analyst at CMC Markets UK, said: “These reports, which still haven’t been confirmed in any official capacity, have prompted a huge relief rally in equity markets, despite concerns that any reopening is unlikely to happen in the immediate future, and the very real risk that it is merely a sucker’s rally.
“As we head into the winter months it seems highly improbable that China would be able to reopen its economy in any meaningful or sustainable way without triggering a more widespread outbreak of Covid infections.
“Notwithstanding all that, investors are piling in just in case, in a classic case of FOMO, Fear of Missing Out.”
Investors in Germany’s top index were in particularly good spirits as the Dax jumped by more than 3% at its highs of the day. It closed 2.5% higher, while the French Cac 40 lifted by an impressive 2.85%.
Sentiment was more mild across the pond following the fallout of the Federal Reserve’s hawkish position on inflation earlier in the week.
The S&P 500 dipped by around 0.05% and Dow Jones was hovering at zero when European markets closed.
The pound managed to claw back gains after falling against the US dollar yesterday, when the Bank of England warned the UK economy is headed for a prolonged recession.
When markets closed, sterling was up 1.2% against the US dollar. But it was down 0.46% against the euro.
In company news, furniture retailer DFS has revealed a bounce back in sales since September after previously identifying a dip in consumer spending.
The sofa giant told shareholders that it was on track to deliver pre-tax profits of £36 million for the full year. Its shares were up by 5.95%.
Meanwhile, shares in the Daily Mirror and Daily Express owner Reach moved higher after its smaller rival National World said it was in “at the early stages of exploring a possible offer.”
The possibility of a Reach takeover tempted investors, despite National World not yet approaching the firm with an offer, and its shares were up 1.93% at the end of the day.
The biggest risers on the FTSE 100 were Anglo American, up 295.5p to 2,951.5p, Prudential, up 75.2p to 913.6p, Fresnillo, up 54p to 755.8p, Rio Tinto, up 355p to 5,030p, and Endeavor Mining, up 111p to 1,573p.
The biggest fallers on the FTSE 100 were BAE Systems, down 24.6p to 798.8p, Pearson, down 19.4p to 951.2p, BT Group, down 2.3p to 114.1p, J Sainsbury, down 2.9p to 208.7p, Ocado Group, down 5p to 634p, and Relx, down 7p to 2,308p.