February 10, 2017 / 11:00 AM / in 8 months

FTSE gets mining boost, hits three-week high

LONDON (Reuters) - Britain's commodity-heavy FTSE 100 .FTSE index climbed to a three-week high on Friday, with a rally in metals prices on soothing Chinese data and supply concerns boosting shares in basic resources companies.

A red London bus passes the Stock Exchange in London, Britain, February 9, 2011. REUTERS/Luke MacGregor/File Photo

The blue-chip FTSE 100 index ended 0.4 percent higher at 7,258.75 points after hitting an intra-day peak of 7,274.80, the highest since Jan. 17. The benchmark index, up 1 percent this week, marked a second week of gains.

The UK mining index .FTNMX1770 gained 3.6 percent as copper rose after China reported better-than-expected trade data for January and workers at BHP Billiton’s (BLT.L) mine in Chile went on a strike that threatened to disrupt copper supply. Prices of other industrial metals were also sharply higher.

Shares in Anglo American (AAL.L), Antofagasta (ANTO.L), Rio Tinto (RIO.L), Glencore (GLEN.L) and BHP Billiton -- top five gainers in the FTSE 100 index -- advanced 2.4 to 5.6 percent.

Sentiment also improved after data highlighted that British manufacturing grew more strongly than expected in December, suggesting the economy remained resilient to the end of the year despite June’s Brexit vote shock.

“There is plenty to be cheery about UK plc. Industrial production growth hit a six-year high in the final month of 2016 ... While slower than the 2.1 percent seen in Nov, it was miles ahead of the flat growth expected,” said Neil Wilson, analyst at ETX Capital.

“Today’s data confirm that the UK economy remains very resilient and lends support to the Bank of England’s decision to revise up its 2017 growth outlook.”

Shares in Reckitt Benckiser (RB.L), however, were the biggest losers among the blue chips, down 3 percent after reaching a deal to buy U.S. infant formula maker Mead Johnson Nutrition MJN.N for $16.6 billion.

Among mid-caps, speciality chemicals maker Elementis (ELM.L) rose more than 10 percent after saying it would buy U.S.-based SummitReheis for an enterprise value of $360 million. The deal would increase the annual sales of its personal care business to $200 million and boost its adjusted earnings.

On the downside, Just Eat (JE.L) fell 6.5 percent after the chief executive of the online food delivery company was to quit due to “urgent family matters”, prompting the chairman to step into his role on a temporary basis.

Reporting by Kit Rees and Atul Prakash

Our Standards:The Thomson Reuters Trust Principles.
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