FTSE 100 loses early Chinese confidence

Monday 10th November 2008

The FTSE 100 rose today 0.89 per cent to 4,403.92.

Early gains in London – spurred on by China's decision to spend $600 billion to prop up its economy – were lost during the day following New York's jump then fall.

At 12:15 EST (17:15 GMT) the Dow was up just 0.04 per cent.

Miners led the gains for London, with Anglo American up 11.56 per cent, Xstrata up 11.52 per cent and Lonmin climbing 8.80 per cent.

LSE Group was up 10.21 per cent and Wood Group gained 10.24 per cent.

Thomas Cook led the fall – dropping 6.33 per cent.

Kingfisher was down 6.12 per cent, Tesco fell 5.89 per cent, Prudential slipped 4.74 per cent and Standard Chartered slid 4.73 per cent.

Anthony Grech, market strategist at IG Index, said: "This £374.6 billion injection of funds from the Chinese worked like a shot of adrenaline in early morning trading, especially for global commodities including mining and oil.

"Another bail-out package, another short-term boost for the FTSE and global markets.

"However, this is a big number from a big economy in the Chinese government, and it has certainly stimulated growth and hope for troubled commodities."

He added: "Negative data has been the trend recently, although eyes will be watching the UK labour market figures and US Treasury budget report this week with interest for any clue as to the short-term direction for the blue-chip index."

On the currency markets sterling was down 0.325 per cent – making £1 worth £1.564 - while against the euro £1 bought €1.226, so €1 now buys 81.6p.

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