London’s blue-chip stocks ended the day higher as China and the European Central Bank encouraged investors.
The People’s Bank of China cut the benchmark one-year lending rate to 4.35% from 4.6% while the one-year deposit rate was cut to 1.5% from 1.75%.
This came after the ECB held interest rates on Thursday, but president Mario Draghi opened the door to a rate cut or more quantitative easing at the central bank’s December meeting.
Jasper Lawler at CMC Markets said: “The ECB had put markets in a cheery mood anyway but when China cut interest rates, the cheer turned into more of a holler”.
The cuts were among a number of measures designed to stimulate the Chinese economy, and unsurprisingly the resource companies responded positively to the development.
Embattled commodities group Glencore (LON:GLEN), up around 3% to 120p, led the charge, closely followed by silver miner Fresnillo (LON:FRES), up 2.2% to 746p.
They helped push the FTSE100 to 6,444, 1% higher on the day after a very flat week.
Global markets were boosted, and over in the US, the benchmark Dow Jones added 141 points to 17,625, while the Nasdaq, the tech heavy index, added 100 to 5,020. The broader based S&P500 index added 21 points to stand at 2,074.
On the UK corporate front, Shire (LON:SHP) said it is eyeing potential takeovers other than its stalled mega-bid for US rival Baxalta, but refused to name them as it posted third quarter results.
The company said it was not solely focused on Baxalta and continued to evaluate other potentially value-adding smaller deals. Shares were injected, adding 4% to 4,623p.
Elsewhere, Travis Perkins (LON:TPK), which dropped yesterday on an earnings warning, was boosted today by an upgrade today from Citigroup which moved its rating to ‘buy’ from ‘hold’. Shares gained 93p to 1,938p.
Conversely, William Hill (LON:WMH) sounded the alarm as it said profits would be at the bottom end of City forecasts after being hit by the double whammy of a lower win margin and a £23mln increase in duties.
Investors cashed out early on the firm, which dropped 8% to 318p.
Meanwhile, Talktalk Telecom Group (LON:TALK) plummeted as reports suggest that the cyber-attack on the company’s web site has been followed by a ransom demand from the hackers. Shares fell 4.3% to 256p.
In the small cap space, Optibiotix Health (LON:OPTI) rose 6.7% to 52p. The share price rise can be in part attributed to Public Health England’s Obesity Report – which mooted plans for a sugar tax.
Elsewhere, Holder Technlogy (LON:HDT) said trading has been in line with expectations everywhere except its German Printed Circuit Board division.
This was impacted by a drop in demand for its products, meaning sales will be lower and the company expects to make an operating loss of £200,000. Shares dropped 12% to 33p.