Strong commodities and SAB Miller drive FTSE to a three-week high
BRITAIN’S top share index reached a three-week high yesterday after gaining for a fourth straight session, driven by strength in commodity stocks after a return to growth in China’s manufacturing sector.
The FTSE 100 index closed up 39 points, or 0.6 per cent, at 5,791.03, extending its gains for the week so far to almost 3.3 per cent, on track to at least match the year’s best week so far, in May, when it also gained 3.3 per cent.
But trading volume was thin with US markets shut for the Thanksgiving holiday.
The Chinese HSBC Flash Manufacturing PMI rose to 50.4 in November, moving above the 50 mark that separates growth from contraction for the first time in 13 months and offering new signs of recovery in the world’s No. 2 economy.
The mining and energy sectors together added about 7.5 points to the UK benchmark index, around a fifth of the total advance, cheered by prospects of stronger future demand from top commodity consumer China. Among the miners, Xstrata rose 1.7 per cent and commodities trader Glencore gained two per cent as the EU antitrust regulator said it had approved the firms’ planned $33bn merger.
But while China’s economy showed recovery, the picture in Europe remained gloomy, with the Markit Flash euro zone Composite PMI reading falling to 45.8 in November, down from 46.0 in the previous month. Meanwhile, British factory orders improved slightly in November, helped by better demand for exports, the CBI’s monthly industrial trends survey showed. However, the total order book balance of -21, up from -23 in October, was below expectations of a reading of -19.