UK's FTSE lifted by mining stocks

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FSTETrader1234 Reuters. A trader monitors the screen on a trading floor in London.

London - Britain's top equity index inched higher on Monday as a strong Chinese factory report lifted mining stocks and as pharmaceutical group AstraZeneca rose on positive drug data.

The blue-chip FTSE 100 index was up by 0.2 percent, or 12.31 points, at 6,856.82 points at the start of the trading day.

A rise in mining stocks, such as Rio Tinto and BHP Billiton, added the most points to the FTSE 100, after data showed that Chinese factory activity expanded at its fastest pace in five months in May.

Mining stocks are particularly sensitive to the state of China's economy, since it is the world's biggest metals consumer.

The sector fell on Friday on concerns about a possible economic slowdown there.

However, mining shares recovered on Monday as the latest Chinese factory data reassured investors over the state of the country's economy, and the FTSE 350 Mining Index - which fell 16 percent in 2013 - rose by 1.3 percent.

“The better data from China has stopped the sell-off on the miners,” said Berkeley Futures associate director Richard Griffiths.

A 0.5 percent rise at heavyweight pharma group AstraZeneca, whose shares have lost ground over the last month after US rival Pfizer walked away from its bid, also gave one of the biggest lifts to the FTSE after the company got positive data for two of its products.

The FTSE 100 has risen by nearly 2 percent since the start of 2014, and hit a peak of 6,894.88 points last month, which marked the index's highest level since December 1999.

However, some traders said the FTSE remained prone to short-term pullbacks if it continued to fail to break above the 6,900 point level in order to challenge a record 7,000 point target.

“I'm still concerned that the FTSE has not broken out above the previous highs yet,” said Hantec Markets analyst Richard Perry. - Reuters

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