MARKET REPORT: FTSE lifts on hopes of China easing Covid curbs

Asia-focused stocks pushed London’s blue-chip index higher on hopes China could ease its Covid measures in the face of growing civil unrest.

As countries around the world nervously watched developments in the world’s second-largest economy, the FTSE 100 rose 0.5 percent, or 37.98 points, to 7512, while the FTSE 250 rose 0.6 percent, or 106.19 points, fell to 19,186.16.

The top London index was lifted by companies heavily exposed to China as investors bet on some lifting of strict Covid restrictions, despite Beijing insisting they stay in place.

“China is the dominant narrative in markets,” said Hugh Gimber, global market strategist at JP Morgan Asset Management.

“Positive news for the Chinese economy is positive news for the global economy.”

Among the Footsie blue-chips, Prudential gained 3.92 per cent, or 36.4p, to 964.8p, ​​while Standard Chartered climbed 5 per cent, or 29.2p, to 609p and Burberry, which makes two-fifths of its sales in China, increased by 1.4 percent, or 29p, to 2140p.

In the second tier, Fidelity China rose 2.4 percent, or 5p, to 215p and Liontrust Asset Management added 0.5 percent, or 6p, to 1120p.

Hopes of an easing of lockdown rules in China also boosted commodities, with rising metal prices sending Rio Tinto 3.7 percent, or 200p, to 5563p, Anglo American 3.7 percent, or 116p, to 3289 .5p and Glencore 2.3 percent, or 12.5p, to 550.8p.

Analysts are divided on Beijing’s next move. Helen Qiao, chief economist of Greater China at Bank of America, said resistance to the restrictions was growing.

“Within this week, or at the latest by the end of next week, we think we’ll see top decision makers come out and talk about the how and why [China] should relax Covid controls,” she said.

Stock watch –

Safestyle fell 9.5%, or 2.95 pence, to 28 pence, an eight-week low after it issued a profit warning.

The window and door company struggled with orders between the end of September and the end of October as customers tightened their belts.

But the value of orders rose 30% in the past three weeks compared to a year earlier.

However, around 5,000 fewer frames are expected to be mounted this year, meaning earnings will be “substantially below” market expectations.

But Chi Lo, a China strategist at BNP Paribas Asset Management, warned that while the protests “could push the government to open faster, they could backfire if Beijing really wants to act – we just don’t know.”

Back in London, Halma fell 6.3 percent, or 143 pence, to 2128 pence after UBS downgraded the safety equipment maker’s rating from ‘buy’ to ‘neutral’ and lowered its price target from 3300 pence to 2470 pence.

John Wood fell 15.9 percent, or 25.4 pence, to 134 pence on concerns about oilfield services and the engineering firm’s near-term prospects.

While annual revenue is expected to be between £4.34bn and £4.59bn, this would be less than the £5.34bn generated a year earlier. JP Morgan lowered the target price from 262p to 237p.

Investors in 888 responded positively to the online gambling group’s plans to streamline the business.

The company, which this year bought William Hill’s non-US business, including its UK bookmaking arm, will cut costs faster than expected, aiming to save £87m by 2023 compared to a previous target of £54m.

Shares rose 0.3 percent, or 0.3 pence, to 103 pence.

Wise welcomed an increase in customers choosing to use the money transfer giant to transfer their money.

Sales rose 55 percent to £397.4 million in the six months to September, while profits rose 173 percent to £51.3 million.

Last year it hired 1,000 employees. The shares, which floated at 800p in July last year, fell 3.2 percent, or 20p, to 611.8p.

Topps Tiles shrugged off rising gas prices and posted record sales for the second year in a row – up 8.4 per cent to £247.2 million in the year to October. Shares rose 1.5 percent, or 0.6 pence, to 40.6 pence.

And sandwich maker Greencore reported sales up 31.3 percent to £1.7 billion for the year to September.

However, it warned that consumer spending was likely to be hit by the cost-of-living crisis. It fell 8.4 percent, or 6 pence, to 65.2 pence.