Britain’s top share index started the second half of the year on a positive note, towed higher by heavily weighted mining stocks after fresh data pointed to continuing demand from China, the world’s biggest metals consumer.
Miners rose 1.8 percent, the top sectoral gainer, after public and private surveys from China showed government policy was helping to support demand in the economy.
Resilient Chinese demand, coupled with tight supply, helped to push copper to its highest in nearly four months, and saw global miners such as Rio Tinto and BHP Billiton gain 3 percent and 1.5 percent respectively.
“We’re not underweight miners, and we remain selectively positive on them, as we believe that returns to shareholders will come through as 2014 progresses,” Jeremy Batstone-Carr, market analyst at Charles Stanley, said.
“If investors are piling in to bet on this, then perhaps the FTSE 100 will have a better performance in the third quarter than it has had so far this year.”
Precious metal miners such as Randgold and Fresnillo were also strong gainers, after gold hit a three month high as escalating violence in Iraq boosted its safe-haven appeal.
The FTSE 100 was up 28.28 points, or 0.4 percent, at 6,772.22, tipping the index into slightly positive territory for the year on the first day of the third quarter.
The 0.4 percent gain for the index so far in 2014 compares poorly to a 4.2 percent gain for euro zone blue chips, which have benefitted as the European Central Bank moves to ease policy just as the Bank of England considers tightening it.
The FTSE 100 is nearly 2 percent off its 2014 peak of 6,894.88 in May, which marked its highest since December 1999.
“There is a possibility for the underperforming stocks and sectors to play catch up in the second half,” Zeg Choudhry, head of trading at Northland Capital, said.
“We should hit record highs by the end of the year, regardless of what the Bank of England does.”