The FTSE 100 just closed in London up 3.09%, or up 182.47 points at 6,081.34, bouncing back from yesterday’s China-driven collapse.
It’s the first rise on the index in 11 sessions.
The biggest riser on the index was Antofagasta, the Chilean copper mining giant. The company bounced up 9.2% despite a 49% fall in first-half profits.
Management said it would be a “year of prudence” with $US160 million of cost cutting as copper prices fall, the FT reports — exactly what investors like to hear.
But just as it was sentiment that pushed the FTSE 100 lower yesterday, it was sentiment that lead it back up today.
Yesterday there was only one rising stock on the FTSE, RSA, but today there were just 3 companies that ended the day down — Randgold Resources, Fresnillo, and Royal Mail. So it was a broad-based recovery.
Analysts pointed to China’s interest rate and reserve requirement rate cuts as providing a boost for markets around the world.
Connor Campbell, financial analyst at SpreadEx says:
News that the People’s Bank of China had cut its benchmark interest rate by 0.25%, alongside a 0.5% slash to the reserve requirement ratio, caused a surge on the Western markets that was of a similar franticness to yesterday’s plunge, if only in the other direction.
Even if the Western markets have used the momentum from this rate cut to reverse much of yesterday’s declines (if not those losses that came at the end of last week), it remains to be seen whether the latest moves by the Chinese government will be enough to appease those Chinese investors who have been abandoning the markets in droves.
Despite the FTSE’s bounce, it still hasn’t made back all the ground it lost yesterday, as the chart below show.
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