Britain's FTSE rises as Reckitt rallies

IOL pic aug14 britain ftse 100 AFP Picture: Shaun Curry, AFP

London - Britain's top equity index rose on Monday, extending its recovery from the three-year lows it reached earlier this month, helped by a surge in Reckitt Benckiser.

The FTSE 100 index was up by 2.1 percent at 5 829.88 points by 1130 GMT. Consumer goods group Reckitt rose 6.2 percent, one of the biggest gains on the FTSE 100.

Reckitt posted stronger-than-expected full-year sales, helped by its focus on faster-growing consumer health products .

“These were a phenomenal set of results,” said Bernstein analyst Andrew Wood. “RB blew away consensus on every major metric.”

HSBC also advanced 1 percent. HSBC, Prudential and Standard Chartered benefited from a rise in shares in Hong Kong, where they have major operations. HSBC also said it would keep its business headquarters in Britain .

The FTSE still remains down by 7 percent since the start of 2016 and some 20 percent below a record high reached in April 2015, in spite of a rebound over the last two sessions.

World stock markets have been hit since the start of 2016 by signs of a slowdown in China, the world's second-biggest economy. China reported on Monday its January trade performance came in worse than expected as tepid demand persisted .

However, some traders took reassurance from comments by China's central bank governor that there was no basis for a continued depreciation in the yuan. Declines in the currency had rocked global markets last month and last August.

“The trade numbers are particularly disappointing, as we had started to see some recovery and we expected it to continue on the basis of the CNY's depreciation,” said Guy Foster, head of research at Brewin Dolphin.

“Nevertheless, markets are in good spirit, partly because of reassuring comments from the PBoC that the depreciation may have largely run its course.”

Only four FTSE 100 stocks were in negative territory. Two of those were precious metals mining companies Randgold and Fresnillo, as gold fell more than 2 percent. The rebound in stocks suggested more appetite for risk, pulling gold prices down from last week's one-year high.

REUTERS

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