By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Mining firms led U.K. stocks higher on
Monday after upbeat Chinese factory figures, while the broader
market found support in data confirming the U.K.'s economic
recovery.
The FTSE 100 index gained 0.3% to end at 6,864.10, after closing
out May on Friday with a second straight monthly advance.
In Monday's trade, mining firms did the heavy lifting, given
muscle by encouraging Chinese data. China's official manufacturing
Purchasing Managers Index rose to 50.8 in May, compared with 50.4
in April, beating expectations of a 50.6 reading. A print above 50
signals expansion.
Miners are sensitive to growth indications from China, as the
country is a major user of natural resources. Shares of Anglo
American PLC picked up 2.3%, Rio Tinto PLC (RIO) climbed 2.1%, and
BHP Billiton PLC (BHP) advanced 1%. Metals were mixed, with only
copper (HGN4) and silver (SIN4) in positive territory.
PMI data were also in focus for the U.K. The Markit/CIPS
manufacturing PMI reading slipped to 57 in May, from 57.3 in April,
but was still among one of the highest levels in the survey's
history. Markit also said the PMI now has signaled improvement in
overall trading conditions in every month since March last
year.
"The revival of U.K. manufacturing continued in May, as the
sector basked in one of its brightest growth spells of the past two
decades," Rob Dobson, senior economist at Markit, said in the
release. "However, with manufacturing still some 7.5% smaller than
its pre-crisis peak, even at this current growth rate, it would
take until late-2015 to achieve full recovery."
In other data news in the U.K., the Bank of England said the
number of approved new home loans fell in April for the third
straight month, a sign that tighter lending rules may be starting
to cool the housing market.
Home builders, however, were mostly on the rise in Monday's
action. Shares of Berkeley Group Holdings PLC climbed 2%, Taylor
Wimpey PLC climbed 1.6%, and Persimmon PLC put on 0.8%. Barratt
Developments PLC put on 1.2% after Goldman Sachs lifted the house
builder to buy from neutral. The analysts said the current
valuation doesn't appropriately reflect earnings growth, and they
forecast improving returns.
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