Yahoo Finance FTSE share index ends higher, miners help
By Atul Prakash
LONDON (Reuters) - Britain's top share index ended higher on Monday, recovering from last week's drop helped by expectations that more infrastructure spending and policy stimulus in China will boost mining companies.
The UK mining index , up 0.8 percent, was among the top sectoral gainers, with shares in Antofagasta (ANTO.L), Randgold Resources (RRS.L) and Anglo American (AAL.L) rising 1.2 to 3.4 percent.
China is the world's biggest metals consumer. "Clearly sentiment has improved on expectations of some further Chinese support. More stimulus means hopefully more industrial production and more demand for metals," said Edmund Shing, global equity fund manager at BCS Asset Management.
Over the weekend, China announced details of a modern Silk Road intended to improve links from Asia to Europe and Africa. Comments from People's Bank of China Governor Zhou Xiaochuan added to hopes of more monetary easing.
Among other sharp movers, Kingfisher (KGF.L) rose nearly 2 percent after Europe's largest home improvement retailer said its proposed 275 million euro (202.4 million pounds) purchase of smaller French rival Mr Bricolage had collapsed.
The blue-chip FTSE 100 index (.FTSE) finished 0.5 percent higher at 6,891.43 points, after dropping 2.4 percent last week. The index rose towards a record high of 7,065.08 set on Tuesday, but remained about 2 percent away from that level.
Despite its return to all-time highs, the British blue-chip index has underperformed euro zone shares since the euro zone crisis peaked in the summer of 2012.
A UK general election on May 7, the outcome of which is still deeply uncertain, has many investors betting that this underperformance could continue.
"On the positive side, UK relative valuations have improved substantially following the 30 percent underperformance versus the euro zone. However, the May elections could be quite messy; we prefer to stay (underweight) into that event risk," equity strategists at JP Morgan said in a note.
Shares in ARM rose 2.5 percent, recovering after dropping 10 percent in two days last week. It gained following a rebound in semiconductor stocks in U.S. trade on Friday after a report that Intel (INTC.O) was in talks to buy rival Altera Corp (ALTR.O).
"The sector is still fairly solid. It obviously had a pull-back over the last week or so ... but the trend remains fairly bullish across the board," said Manoj Ladwa, head of trading at TJM Partners.
(Additional reporting by Alistair Smout; Editing by Catherine Evans/Ruth Pitchford)
