By Johann M Cherian and Shristi Achar A
(Reuters) -UK’s commodity-heavy FTSE 100 closed higher on Monday, with miners leading the gains following an easing of China’s COVID-19 restrictions, although worries about a slowing European economy weighed on the broader markets.
The blue-chip FTSE 100 edged up 0.2%, with industrial miners climbing 1.1% on a boost from higher metal prices after the easing of COVID-19 restrictions in top metals consumer China. [MET/L]
“There’s been a little bit of optimism on the reopening narrative out of China, and there is also news that China might downgrade its alert level for COVID. So that’s been lifting markets,” said Giles Coghlan, chief market analyst at HYCM.
However, the broader European markets came under pressure after data showed euro zone business activity declined for a fifth month in November, suggesting the economy was sliding into a mild recession.
Meanwhile, Britain’s services sector shrank slightly for a second month running in November as cost-of-living pressures for households and businesses’ uncertainty about the economic outlook squeezed demand.
The domestically focussed midcap FTSE 250 slipped 0.2%, with real estate company Savills Plc dropping 9.4% to the bottom of the index after Peel Hunt downgraded the stock.
Both FTSE 100 and FTSE 250 indexes have recovered sharply from October lows on expectations that the Federal Reserve will shift to smaller rate hikes amid signs of a cooling U.S. economy.
The Bank of England is also widely expected to make a 50-basis point rate hike next week.
Among other stocks, Cineworld Group gained 2.0% after its lenders held talks on breaking up the bankrupt cinema chain and selling its eastern Europe operations, as per a Bloomberg report.
Vodafone Group gained as much as 1.7% during the day before slipping 0.1% after the mobile network operator said Chief Executive Nick Read would step down at the end of this year and be replaced on an interim basis by finance chief, Margherita Della Valle.
(Reporting by Johann M Cherian and Shristi Achar A in Bengaluru; Editing by Savio D’Souza and Nick Zieminski)
