The FTSE 100 traded at it’s highest level of the year today, boosted by improving Chinese trade data released overnight. The general market sentiment has risen markedly of late as a resurgent oil price has buoyed risk-assets and contributed to a rise of over 15% from the February lows for the UK’s benchmark Index.
Mining stocks have led the way higher with Anglo American (LON:AAL) (+7.94%), BHP Billiton (LON:BLT) (+6.04%), and Glencore (LON:GLEN) (5.69%) all set to post impressive daily gains.
The UK blue-chip index rallied over 100 pts today, trading at a high of 6358.50 and the fear that gripped the market just a couple of months ago seems to be dissipating rapidly.
The release of the latest trade balance data from China showed an 11.5% year on year rise, the largest since February last year, as concerns over the world’s second largest economy continue to wane. Later this week the more widely viewed GDP figure will be released, and with forecasts showing a drop to 6.8% from 6.9% year-on-year, there remains the possibility that we’re not out of the woods yet. If we get disappointing Chinese GDP data, investors will be encouraged to cash in their gains out of protection.
The improving risk appetite is evident in the financials sector with UK banks Barclays (LON:BARC) and RBS (LON:RBS) gaining 5.9% and 5.2% respectively. The rise in Barclays shares comes on the same day that news broke of 8000 job cuts in the past four months, as the bank continues to push forward with a cost-cutting drive which has also seen the firm recently slash the dividend payout by more than half.
Elsewhere Tesco (LON:TSCO) announced their first quarterly profit in over three years this morning, but CEO Dave Lewis’s warning during the following conference call that “profit growth won’t be smooth, we are in a turnaround” has spooked investors and shares have tumbled by over 6% since the announcement.