FTSE up as Basel ruling, China data buoy investors

By David Brett

LONDON (BestGrowthStock) – Britain’s top shares rose by midday on Monday as new banking rules published on Sunday came in less severe than expected and bullish production data from China increased investors’ appetite for riskier assets.

By 1053 GMT (6:53 a.m. EDT), the FTSE 100 was up 61.97 points, or 1.1 percent, at 5,563.61, having hit a four-month closing high on Friday, up 0.1 percent at 5,501.64.

Banks rose sharply after global regulators agreed to force them to more than triple the amount of top-quality capital they must hold in reserve, but gave the lenders transition periods up to January 2019 or later, to comply with the rules.

Lloyds Banking Group gained 3.0 percent.

UK insurer Prudential added 2.7 percent, hitting an eight-month high, after the Sunday Times newspaper reported that a group of Chinese investors are in the early stages of considering a takeover offer for the company.

The FTSE 100 is trading well above the key 61.8 percent Fibonacci retracement of the April peak to July low, and is seen going even higher.

“The month of September is likely to bring an increase in volume and volatility and judging from the current chart pattern we may see higher prices for the week ahead,” Sandy Jadeja, technical analyst at City Index said, adding the next significant level for the FTSE is the 5,610 level.

U.S. SEEN FIRMER

Wall Street futures looked to a positive opening on Monday, having closed last week with its seventh gain in eight sessions in a turnaround that has seen investors’ worst fears about the economy start to dissipate.

Bullish optimism was underpinned by data from China, which showed factories increased production in August and money growth easily topped analysts’ expectations.

“It’s a question now of convincing the markets that what we’re seeing in China is simply very strong growth rather than overheating, and today’s figures tend to suggest the former,” Richard Hunter, head of UK Equities at Hargreaves Lansdown Stockbrokers said.

The data sparked demand for energy and mining stocks, which rose in tandem with commodities, as crude gained $1 a barrel and metals prices climbed across the board.

Copper miner Kazakhmys rose 3.6 percent to top the FTSE 100

leaderboard, outperforming a sector-wide uptick, after breaching key resistance at around 1,300 pence.

Elsewhere, Wolseley gained 3.4 percent and mid cap peer Travis Perkins added 3.3 percent after Morgan Stanley said in a note both stocks have company-specific growth drivers and remain attractively valued despite weakening macro data.

On the downside, Associated British Foods shares fell 3.3 percent after sales growth at its Primark fashion retailer slowed over the summer months and it warned of lower profit margins at the retailer due to higher cotton costs and increased taxes.

(Editing by Jon Loades-Carter)

FTSE up as Basel ruling, China data buoy investors