Britain’s top share index rose for its fourth straight session on Tuesday to hit its highest level in three weeks, buoyed by growth-sensitive stocks after Chinese data beat expectations.
Investors were relieved after China’s economy grew 7.4 per cent in 2014, barely missing the country’s official 7.5 percent target. Although it was China’s slowest pace of growth in 24 years, many traders had feared a sharper slowdown.
Sectors such as financials and consumer discretionary, which are sensitive to optimism about the economy, rallied, adding more than 10 points to the blue-chip FTSE 100.
“There's a pretty broad rally on the back of the news from China, which is supportive of equities,’’ James Butterfill, global equity strategist at Coutts, said.
“The majority of miners are doing well, but Rio (Tinto) have missed estimates which is hindering the sector.’’
Global miner Rio Tinto fell 1 per cent after a production update. While iron ore production met targets, copper came in slightly below expectations, traders said.
“The numbers were only a slight miss versus estimates and the relative underperformance versus the market and sector we think is overdone,’’ said Atif Latif, director of trading at Guardian Stockbrokers.
Britain’s FTSE 100 was up 21.50 points or 0.4 per cent at 6,607.03 by 0901 GMT, rallying for a fourth straight session and touching its highest since December 30.
The index remains 4.5 per cent off a 14-1/2 year high hit in September 2014, hindered by a decline in heavyweight energy stocks as the prices of oil has slumped and by concerns over global growth.
Consumer goods giant Unilever dropped 1.6 per cent after reporting lower than expected underlying sales growth, hindered by weak emerging markets.
Coca Cola Hellenic also suffered from its global exposure, dropping 4.9 per cent after a downgrade to “neutral’’ from “overweight’’ by JP Morgan, who cited deteriorating macroeconomic trends in Russia and Nigeria.