By Barbara Kollmeyer
The FTSE 100 pushed atop 7,000 for the first time in more than a year as heavily weighted mining stocks climbed after Chinese growth data confirmed the global economy is continuing to recover.
The FTSE /zigman2/quotes/210598409/delayed UK:UKX +0.76% was set to finish the week on a strong note, up 0.5% to 7,019.94. According to FactSet data, the index closed at 7,403.92 on February 21, 2020, just before the COVID-19 pandemic began to rattle investors.
“Investor confidence in economic recovery is rising as governments roll out stimulus packages and business confidence surveys are hitting highs,” said Steve Clayton, Hargreaves Lansdown fund manager, in a note to clients. “Whether the FTSE can close the gap against U.S. and European market indexes is another matter.”
“The U.K. market has much bigger exposure to commodities and banking than Wall Street or Frankfurt, so the performance of those sectors will be key to the U.K.’s relative performance in the years ahead. For now though, sentiment is on the up and the FTSE 100 is having its day in the sunshine,” he said.
A strong banking sector on Friday was a sign of increased confidence in a successful rollout of vaccines, he added. The U.K. government has raced ahead of its own COVID-19 vaccination target with more than 32 million people having received a first shot, with Phase 2 — those aged 45 to 49 — now able to book appointments.
Shares of HSBC /zigman2/quotes/208272822/composite HSBC -0.06% /zigman2/quotes/203901799/delayed UK:HSBA -0.87% , Barclays /zigman2/quotes/206581728/composite BCS +2.91% /zigman2/quotes/208409333/delayed UK:BARC +2.51% and Lloyds Banking Group /zigman2/quotes/200709414/composite LYG +0.78% /zigman2/quotes/202285510/delayed UK:LLOY +0.76% all climbed close to 2%.
Mining stocks got a boost after Chinese data showed blowout gross domestic product growth of 18.3% in the first quarter, and the fastest on record, even as it missed expectations slightly. That compared with 6.5% year-over-year growth in the final quarter of 2020. Industrial production and retail sales also saw double-digit growth.
The data followed strong retail sales and falling jobless claims in the U.S. on Thursday.
Shares of Rio Tinto /zigman2/quotes/208934945/delayed UK:RIO +0.90% /zigman2/quotes/202627887/composite RIO +1.98% rose 1.6%, BHP Group /zigman2/quotes/208108397/composite BHP +1.29% /zigman2/quotes/203323256/delayed UK:BHP +1.02% rose 1% and Anglo American /zigman2/quotes/201381512/delayed UK:AAL +3.55% gained 1.8%. Evraz /zigman2/quotes/202291633/delayed UK:EVR +1.26% was a top gainer, up 3.4%.