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Britain's FTSE share index to advance

Written by Business World, on 30th Mar 2015. Posted in General

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Britain's top share index rose on Monday, recovering after a steep weekly drop, helped by a rally in miners on expectations of more infrastructure spending and policy stimulus in China, the world's biggest metals consumer.

The UK mining index, up 1 percent, was the top sectoral gainer, with shares in Rio Tinto, Antofagasta and Anglo American rising 0.8 to 3.3 percent.

Over the weekend, China unveiled details of its blueprint for a modern Silk Road to improve links from Asia to Europe and Africa, an initiative that could translate into a new wave of investment. Comments from People's Bank of China Governor Zhou Xiaochuan added to hopes of more easing.

Among other sharp movers, Kingfisher rose 2.1 percent after Europe's largest home improvement retailer said its proposed 275 million euro purchase of smaller French rival Mr Bricolage had collapsed.

The blue-chip FTSE 100 index was up 0.4 percent at 6,883.92 points by 1424 GMT, after dropping 2.4 percent last week. The index rose towards a record high of 7,065.08 set on Tuesday, although remained about 2 percent away from that level.

Despite its return to all-time highs, the British blue-chip index has underperformed euro zone shares since the euro zone crisis peaked in the summer of 2012.

A general election on May 7, the outcome of which is still deeply uncertain, has many investors betting that this underperformance could continue.

"On the positive side UK relative valuations have improved substantially following the 30 percent underperformance versus euro zone. However, the May elections could be quite messy; we prefer to stay (underweight) into that event risk," equity strategists at JP Morgan said in a note.

Shares in ARM rose 1.5 percent, recovering after dropping 10 percent in two days last week. It gained following a rebound in semiconductor stocks in U.S. trade on Friday after a report that Intel was in talks to buy rival Altera Corp.

"The sector is still fairly solid. It obviously had a pull-back over the last week or so ... but the trend remains fairly bullish across the board," said Manoj Ladwa, head of trading at TJM Partners. (Reuters)

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