By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- U.K.'s benchmark stock index broke a
three-day losing streak on Thursday, with resource firms putting in
solid performances after encouraging manufacturing data from
China.
The FTSE 100 index jumped 0.9% to close at 6,446.87 after
closing at the lowest level since early July on Wednesday.
Mining firms posted some of the biggest gains in the index,
helped higher by better-than-expected data from China. Miners tend
to rise on growth indications from China as the country is a major
user of natural resources.
The "flash" reading of the China manufacturing purchasing
managers' index, compiled by HSBC and Markit, showed a rebound to a
four-month high of 50.1 from a final reading of 47.7 in July, an
11-month low. A reading above 50 indicates expansion.
The August result was well above the consensus expectation for a
48 reading, as reported by Dow Jones Newswires.
"Today's HSBC PMI now suggest upside risk on our forecast, but
we remain cautious as leading indicators like credit and money
supply growth have continued to show softness. However, as minimum
today's HSBC PMI should contribute to ease fear of a hard landing
in China," analysts at Danske Bank said in a note.
Glencore Xstrata PLC rose 3%, Antofagasta PLC climbed 1.5% and
heavyweights Rio Tinto PLC (RIO) and BHP Billiton PLC (BHP) both
added 1.9%. Metals prices were mostly higher.
Oil firms were also higher, tracking a gain for oil prices.
Shares of Royal Dutch Shell PLC (RDSB) picked up 0.8%, BP PLC rose
1%, and BG Group PLC gained 1.8%.
Another risk-sensitive sector, banks, further posted solid
gains. Shares of Royal Bank of Scotland Group PLC (RBS) added 2.7%,
Lloyds Banking Group PLC (LYG) rose 1.1% and HSBC Holdings PLC
(HBC) picked up 1.5%.
Also among notable gainers, shares of IMI PLC jumped 5.8% after
the engineering group reported an 8% rise in first-half profit and
raised dividends 8%.
Shares of Wolseley PLC put on 4.3% after UBS lifted the
distributor of heating and plumbing products to buy from neutral,
ahead of its earnings results in October.
"Our analysis of U.S. peers that have reported on Q2 suggests
Wolseley's growth should have accelerated to double-digit growth in
Q4 to July," the analysts said.
Outside the main index in London, shares of Premier Oil PLC lost
2.9% after reporting first-half results below expectations.
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