Reuters: Hot Stocks: UPDATE 1-UK's FTSE rises as China data buoys mining stocks

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UPDATE 1-UK's FTSE rises as China data buoys mining stocks Aug 22nd 2013, 16:14 Thu Aug 22, 2013 12:14pm EDT * FTSE 100 closes up 0.9 pct at 6,446.87 points * Rise in China manufacturing index boosts mining stocks * Worries about Fed tapering still linger * FTSE to fall in Sept but then rally back-APS Alpha (Updates with closing prices, adds further comment) By Sudip Kar-Gupta LONDON, Aug 22 (Reuters) - Britain's main equity index rose on Thursday to recover from stinging losses in the previous session, as robust Chinese economic data lifted major mining stocks to allay worries about tighter U.S. monetary policy. The blue-chip FTSE 100 index closed up by 0.9 percent, or 56.03 points, at 6,446.87 points, marking its biggest one-day rise in more than two weeks. The FTSE recovered from a 1 percent fall the previous day as the upbeat manufacturing data from China, the world's biggest metals consumer, boosted mining stocks, with the FTSE 350 Mining Index rising by 2.1 percent. The HSBC Flash China Manufacturing Purchasing Managers' Index rose in August to 50.1, its highest in four months, as new orders rebounded. The data countered lingering negative sentiment surrounding expectations that the U.S. Federal Reserve may start next month to tighten monetary policy measures that have driven much of this year's global equity rally. "The Chinese data came in better than expected, and that's pushed us back up," said Darren Easton, director of trading at Logic Investments. However, Easton was still erring on the side of caution, due to uncertainty over how financial markets may react next month. The U.S. Federal Reserve meets from Sept. 17-18, and expectations that this meeting will see the Fed start to tighten its monetary policy has pushed up bond yields over the last month and in turn hit global equity markets. Easton sold out of the FTSE last week for a profit at 6,600 points having bought in at 6,575 points, but had not bought any fresh positions since. APS Alpha technical strategist Adrian Slack expected the FTSE to drift lower next month in the build-up to the Fed's meeting in September, but felt the market would then rally again towards the end of 2013, with many investors encouraged by signs of an improvement in the global economy. The FTSE has fallen back from a 13-year high of 6,875.62 points reached in late May, but remains up by nearly 10 percent since the start of 2013. "I see further weakness coming into September, but I can't see why we shouldn't be able to test the year highs again by the end of the year," said Slack. (additional reporting by Tricia Wright; Editing by David Cowell) Link this Share this Digg this Email Reprints

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