Miners lead FTSE higher, buoyed by China growth

By David Brett

LONDON (BestGrowthStock) – Britain’s top shares gained ground by midday on Monday, lifted by miners after data from China showed there was no let up in its booming growth.

By 1149 GMT, the FTSE 100 (.FTSE: ) was up 46.24 points, or 0.8 percent at 5,859.19, having notched up a 1.2 percent rise over the course of the previous week, albeit in light volumes as the UK market began its last full week of trading before the Christmas holiday period.

“The need for stronger momentum is required if the rally is to sustain itself,” Sandy Jadeja, chief technical analyst at City Index, said.

“As long as momentum remains positive the upside targets for December could see the index reach for 6,050 to 6,117. It is essential that the FTSE now holds 5,770 as short term key pivots in order to maintain the bullish stance.”

Miners (.FTNMX1770: ) provided the main support for Britain’s blue chip index, gaining on the back of strong Chinese industrial output numbers which topped forecasts and sent copper in London to a record high.

Kazakh mining group Kazakhmys (KAZ.L: ) was the top gainer up 2.4 percent.

Banks (.FTNMX8350: ), which have struggled against the backdrop of worries over sovereign debt problems in the euro zone, were back on the front foot as risk appetite among investors improved. Barclays (BARC.L: ) rose 1.1 percent.

INFLATION CONCERNS

Concerns remained over China’s soaring inflation, which sped to a 28-month high, and showed signs of spreading beyond food prices, putting pressure on the government to ratchet up its monetary tightening policy.

“There’s something of a short-term relief that China decided not to raise interest rates this time round,” said Richard Hunter, head of equities at Hargreaves Lansdown.

“There are still thoughts that if inflation continues to rise at its current rate then further rate hikes are inevitable.”

On the macroeconomic front in the UK, British manufacturers’ input costs rose last month at their fastest annual rate since July, ahead of consumer price inflation due on Tuesday.

Meanwhile, M&A talk was the main driver in the oil services sector. Petrofac (PFC.L: ) rose 1.7 percent with traders citing a read across from mid cap peer Wellstream (WSML.L: ), which is the subject of an 800 million pounds ($1.3 billion) bid from U.S. firm General Electric Co (GE.N: ).

FTSE 250 peer John Wood Group (WG.L: ) was also in demand, up 6.7 percent after agreeing to buy unlisted Scotland-based rival PSN for $995 million.

Companies that have been the subject of recent vague bid talk, however, were on the backfoot with security firm G4S (GFS.L: ) and maker of replacement knees and hips Smith & Nephew (SN.L: ) among the top fallers down 0.6 and 0.9 percent, respectively.

And insurer Prudential (PRU.L: ) fell 0.3 percent after Asian insurance group AIA (1299.HK: ) said it has little interest in bidding for the Far East assets of Prudential.

Elsewhere, British Airways (BAY.L: ) climbed 1.1 percent after the Financial Times reported the airline is discussing changes to its pension scheme rules that would enable it to slash its pension shortfall almost in half.

(Editing by Mike Nesbit)

Miners lead FTSE higher, buoyed by China growth