By Shashwat Chauhan and Ankika Biswas
(Reuters) -The UK’s FTSE 100 started March on a strong footing as higher commodity prices lifted mining stocks after manufacturing activity in top metals consumer China expanded at the fastest pace in over a decade.
The blue-chip index closed 0.5% higher on Wednesday, bouncing after its steepest single-day drop in three weeks and outperforming most European indexes.
The industrial metal miners index surged 3.8%, its biggest one-day gain since early November.
Metals prices rose after data showed a larger-than-expected expansion in China’s manufacturing activity following the lifting of COVID-19 restrictions last year. [MET/L]
“China’s unwinding of its zero tolerance to COVID approach has unleashed a wave of pent up demand from the world’s second largest economy,” said Victoria Scholar, head of investment at Interactive Investor.
“China-sensitive sectors are benefiting from this.”
Glencore, Anglo American, Antofagasta and London-listed shares of Rio Tinto gained between 3.3% and 4.6%, tracking higher copper prices.
Equities also received a boost from sterling trimming most of its gains after Bank of England Governor Andrew Bailey said nothing had been decided in terms of whether interest rates would need to rise again.
Engineering firm Weir Group gained 6.3%, the best blue chip performer on strong full-year earnings.
Reckitt Benckiser rose 1.5% after the Dettol and Lysol cleaning products maker beat full-year like-for-like net revenue expectations.
Aston Martin was 3.2% higher as the luxury carmaker expects to turn free cash flow positive in the second half of the year.
Persimmon, however, dropped 12% after the homebuilder warned of lower profit for 2023 and cut its annual dividend by 75%, making it the worst performer on the index.
Coupled with British house prices dropping by the most in 10 years, other homebuilders like Barratt Developments and Taylor Wimpey fell by 4% each, leading the household goods and home construction sector down 5.0%.
(Reporting by Shashwat Chauhan and Ankika Biswas in Bengaluru; Editing by Sherry Jacob-Phillips, Kirsten Donovan)
