London close: Commodities and retail stocks provide a big lift

(Sharecast News) - UK stocks rallied on Thursday afternoon to finish at their highest level in two and a half weeks, as strong gains in the oil, mining and retail sectors pushed the FTSE 100 up more than 1%. The Footsie closed the session 1.1% higher at 8,260.09, trading at levels not seen since 16 December.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said a "pulse of positivity" helped stocks despite some weaker-than-expected manufacturing data from China early on. "Gains in the oil price boosted energy majors and mining stocks rose amid expectations that Chinese authorities will come forth with more stimulus to boost the world's second largest economy," Streeter said.

The Caixin China manufacturing PMI unexpectedly declining to 50.5 from a five-month high 51.5 in November (consensus: 51.7). The survey showed that new order growth eased on the back of "softening external demand".

Despite the weak data, mining heavyweights Fresnillo, Glencore and Endeavour were all putting in a solid showing in London.

Russ Mould, investment director at AJ Bell, said it was "somewhat perplexing" to see mining stocks perform well on Thursday, saying that jump in share prices "will have been influenced by a weaker pound against the US dollar".

Shares of BP and Shell were also higher as Brent crude gained 2.4% to $76.40 a barrel by 1640 GMT - a level not seen since mid-October - in the aftermath of a big drawdown of US crude stocks last week, which Streeter said "highlighted the ongoing strength of demand for energy in a buoyant US economy".

She said: "There's a glass half full attitude taking hold, despite the threat of tariffs looming over the global economy, and the potential for inflation to stay stubborn in the US. For now, the focus is on what appears to be the enduring resilience of the American economy, with jobless claims falling sharply, underlying the buoyant labour market."

Numerous festive holidays have meant that there has been little to guide market sentiment over the past week or so. And while the corporate earnings calendar still remains quiet, things have picked up for economic data.

Revisions to S&P Global's manufacturing PMIs from the UK, eurozone and US all showed that activity across each region remained in contraction in December, with all three readings showing that the downturn worsened last month.

In other news, Marks & Spencer received a boost from speculation that the retailer performed well over the key Christmas trading period, with peers Tesco, Sainsbury and Ocado also on the rise.

Helping sentiment in the sector was news that fellow grocery chain Lidl posted a large sharp rise in sales at its UK division over the festive season, with turnover passing the £1bn mark for the first time over the four weeks to December 24.

Market Movers

FTSE 100 (UKX) 8,260.09 1.07% FTSE 250 (MCX) 20,640.23 0.09% techMARK (TASX) 4,643.68 0.43%

FTSE 100 - Risers

Fresnillo (FRES) 650.00p 4.59% Marks & Spencer Group (MKS) 388.90p 3.57% Rolls-Royce Holdings (RR.) 588.40p 3.48% Airtel Africa (AAF) 117.00p 2.99% Glencore (GLEN) 363.55p 2.87% Centrica (CNA) 137.20p 2.69% BP (BP.) 403.15p 2.58% Pershing Square Holdings Ltd NPV (PSH) 3,988.00p 2.52% British American Tobacco (BATS) 2,952.00p 2.50% Hiscox Limited (DI) (HSX) 1,109.00p 2.40%

FTSE 100 - Fallers

St James's Place (STJ) 853.50p -1.67% Barratt Redrow (BTRW) 434.60p -1.25% Persimmon (PSN) 1,184.00p -1.17% Intertek Group (ITRK) 4,678.00p -1.06% Croda International (CRDA) 3,353.00p -0.95% SEGRO (SGRO) 695.00p -0.88% JD Sports Fashion (JD.) 95.14p -0.79% Kingfisher (KGF) 246.80p -0.76% Mondi (MNDI) 1,183.50p -0.71% Standard Chartered (STAN) 982.20p -0.65%

FTSE 250 - Risers

Ithaca Energy (ITH) 118.00p 6.88% Raspberry PI Holdings (RPI) 663.75p 6.20% Endeavour Mining (EDV) 1,495.00p 4.91% Ocado Group (OCDO) 315.20p 4.27% Hochschild Mining (HOC) 221.50p 3.50% Future (FUTR) 953.50p 2.86% The European Smaller Companies Trust (ESCT) 176.80p 2.79% Energean (ENOG) 1,072.00p 2.78% Safestore Holdings (SAFE) 661.50p 2.72% VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 480.50p 2.67%

FTSE 250 - Fallers

Plus500 Ltd (DI) (PLUS) 2,560.00p -5.47% Trainline (TRN) 413.60p -4.26% IntegraFin Holding (IHP) 331.00p -4.20% Foresight Group Holdings Limited NPV (FSG) 398.00p -3.16% Marshalls (MSLH) 285.50p -3.06% Trustpilot Group (TRST) 298.50p -2.77% Genuit Group (GEN) 379.00p -2.70% Big Yellow Group (BYG) 935.00p -2.60% Alpha Group International (ALPH) 2,280.00p -2.56% B&M European Value Retail S.A. (DI) (BME) 357.80p -2.51%