China stimulus plan lifts FTSE 100; G4S boosts mid-caps

(Reuters) - London’s FTSE 100 rose on Friday as a new stimulus plan from China helped support sentiment after U.S. jobs data disappointed and housebuilder Berkeley gained after pointing to robust conditions in key British markets despite Brexit uncertainties.

FILE PHOTO: Traders looks at financial information on computer screens on the IG Index trading floor in London, Britain February 6, 2018. REUTERS/Simon Dawson

The main index .FTSE edged 0.2% higher, tracking global stock markets that welcomed China's move to slash the amount of cash that banks must hold as reserves, which will provide more liquidity to support its economy.

The mid-caps .FTMC advanced 0.3%, helped by a 6.5% jump in G4S GFS.L, the world's largest private security firm, after Sky News reported U.S. security company Brinks BCO.N was mulling a takeover of G4S' cash solutions unit.

China's stimulus plan helped boost blue-chip mining stocks such as Glencore GLEN.L and BHP BHPB.L. Packaging firm Smurfit Kappa SKG.L rose 3.4% to the top of the FTSE 100 as its latest bond offering incited demand from yield-starved investors.

“(Smurfit’s) bond offering, at relatively advantageous rates as fixed-income yields trend lower, will provide it with much cheaper financing,” Cityindex analyst Ken Odeluga said.

Homebuilder Berkeley BKGH.L rose 2.8% after pointing to robust market conditions in London and southeast England.

The much-anticipated and traditionally influential U.S. non-farm payrolls numbers showed slower-than-expected growth in August, pointing to an economy slowing against the backdrop of President Donald Trump’s trade war with China.

“The employment report pretty much cements only a 25-basis-point rate cut for the U.S. Federal Reserve at the Sept. 18 meeting,” said Edward Moya, senior market analyst at Oanda.

The main index's gains were kept in check by oil heavyweights BP BP.L and Shell RDSa.L, which tracked a fall in crude prices, and utilities that slipped on the prospect of renationalisation if a Labour government took power in Britain.

Shares of SSE SSE.L, Centrica CNA.L and Severn Trent SVT.L shed roughly 2%. A snap election remains a possibility as lawmakers prepare for a showdown over delaying Brexit.

“While no-deal Brexit risks have been abated, the nationalisation risks remain firmly in place,” Moya said.

United Utilities UU.L lost 2.9% as a rating and price target downgrade from RBC also weighed on the stock.

Reporting by Muvija M and Shashwat Awasthi, additional reporting by Indranil Sarkar in Bengaluru; Editing by Bernard Orr and Dale Hudson