By Siddarth S, Rupali Chaudhary and Khushi Singh
(Reuters) -The UK’s FTSE 100 rose on Wednesday driven by a sharp rally in energy and mining stocks after Chinese deflation spurred hopes of more stimulus, while upbeat bluechip earnings also boosted sentiment.
The FTSE 100 index posted its biggest daily gain in three weeks, up 0.8%, while the more domestically-focused FTSE 250 index added 0.5%.
Industrial metal miners climbed 1.5% as metal prices rose after data showed the world’s top metals consumer China fell into deflation.[MET/L]
The energy sector was the session’s biggest gainer though, rising 2.5%, led by BP’s 2.6% gain as the Brent crude price touched its highest since April. [O/R]
“The numbers from China are so bad that it’s good,” said Steve Sosnick, chief strategist at Interactive Brokers. “The thought is that this will finally spur China to come up with really major stimulus, thus helping the prices of oil and commodities in general.”
Bank stocks rose 0.5%, reversing some of the previous session’s 1.5% fall after Italy’s government eased its stance on a new banking levy.
Among companies reporting, bottler Coca-Cola HBC rose 0.7% after raising its annual sales outlook.
“When a consumer company gives good guidance, it bodes well for the health of consumers in the economy at large”, said Sosnick.
Hill & Smith Holdings shares jumped 7.0%, as the infrastructure products maker reported a bright profit outlook.
The world’s biggest inter-dealer broker TP ICAP also rose 7.0% after announcing a 30 million pound ($38.3 million) share buyback and reporting higher half-yearly profit.
Lloyd’s of London insurer Hiscox was the FTSE 100’s biggest loser, down 6% as weaker retail outlook overshadowed jump in first-half profit.
Meanwhile, London-listed shares of Flutter Entertainment lost 3.4% after the world’s largest online betting company warned of a weaker Australian market outlook.
(Reporting by Siddarth S, Rupali Chaudhary and Khushi Singh in Bengaluru; Editing by Rashmi Aich, Kirsten Donovan)
