LONDON (Reuters) - Britain’s top share index closed in marginally positive territory on Monday, as a rally in mining stocks following new stimulus measures from China - the world’s top metals consumer - lent support to the market.
The blue-chip FTSE 100 index .FTSE closed up 1.1 points - flat in percentage terms - at 6,097.09 points. The FTSE also marked its first monthly gain since October.
The FTSE came off its earlier intraday lows after China’s central bank cut the reserve requirement ratio - the amount of cash that banks must hold as reserves - by 50 basis points to help revive a slowing economy.
The latest moves by China to prevent a slowdown in its economy spurred UK mining stocks, given China’s importance in terms of demand for metals. Anglo American (AAL.L) rose 6.6 percent while rival Glencore (GLEN.L) advanced 4 percent.
Nevertheless, the FTSE remains down 2 percent so far in 2016 and 14 percent below its April 2015 record high, with world markets having been hit by signs of a weaker global economy.
The G20 group of the world’s top economies failed to come up with a firm plan on Saturday for specific coordinated stimulus spending to boost activity, as some investors had been hoping after markets nosedived at the start of 2016.
“The G20 outcome was disappointing, as there was a lot of talk and not a lot of action, but it’s good to see China still has some ammunition in its war chest to try and spur demand,” said Dafydd Davies, partner at Charles Hanover Investments.
Investors cheered mid-cap Morrison’s supply deal with Amazon, with Morrison rising 5.9 percent.
“This is good news for the UK’s 4th biggest supermarket as it aims to boost volumes, increase the reach of its brand and implement further self-help in an industry still struggling from fundamental change,” said Mike van Dulken, head of research at Accendo Markets.
However, some analysts said the Amazon/Morrison deal could impact larger rivals such as Tesco (TSCO.L), whose shares fell on concerns about the increasing competition.
Reporting by Kit Rees; Editing by Gareth Jones