LONDON, Jan 2 ― British shares rose in the first trading session of the new decade as investors welcomed China's monetary policy easing to support slowing growth and US President Donald Trump set the date for sealing a trade deal with Beijing.
The FTSE 100 advanced after two straight sessions of losses to rise 0.8 per cent, with all sectors in the black, after China cut the reserve requirement ratio (RRR) for banks.
Mining shares led gains, with Antofagasta and Glencore advancing more than 2.5 per cent each, after policy action from the world's top metals consumer.
“The move on the RRR had been well telegraphed but came as a welcome New Year's gift,” OANDA analyst Jeffrey Halley said.
The FTSE 250 rose 0.5 per cent though Tullow Oil lagged, plunging as much as 18 per cent as results of drilling at its Carapa-1 well offshore Guyana disappointed investors.
“The results from the Carapa-1... are, in our view, a negative,” Berenberg analysts wrote. They added that the four metres of net oil pay reported from the well was unlikely to be commercial.
Broader sentiment was also bolstered after Trump announced a January 15 deadline to sign a Phase 1 trade deal with China, though markets still await concrete details of the agreement.
As a result, oil prices climbed higher, leading heavyweights Shell and BP to further boost the blue-chip bourse.
Despite the gains, trading volume remained thin, and Halley suggested that would be the case until next week.
“The New Year holiday falling mid-week means a real return to work for Europe, the USA... won't happen until Monday,” he said.
Thursday's gains came after two sessions of profit-taking and traders clearing the decks ahead of fresh bets in the new year, and followed the FTSE 100's best run in three years. ― Reuters
