FTSE rebounds from 15-month low as China data boosts miners
* Blue-chip FTSE 100 index up 0.4 percent
* Miners rally following Chinese trade data
* Charts signal further weakness in short term
By Atul Prakash
LONDON, Oct 13 (Reuters) - Britain's top share index rose
from a 15-month low on Monday, led by a sharp rally in mining
stocks following better than expected trade data from China.
The mining index surged 3 percent, the biggest
sectoral gainer, after Chinese exports rose 15 percent in
September and copper imports rose nearly as much, encouraging
investors over demand in the world's top metals consumer.
Anglo American (LSE: AAL.L - news) , Randgold Resources, Rio
Tinto, Fresnillo (Other OTC: FNLPF - news) and BHP Billiton (NYSE: BBL - news) , up
2.7 to 4.2 percent, were among the top gainers.
Anglo American was also helped by more reports of potential
asset sales in Chile, while Rio Tinto (Xetra: 855018 - news) got some strength from a
report saying its stock could rise as much as 20 percent in the
next year.
Fund managers and analysts advised caution, saying investors
were taking advantage of an 18 percent drop in the UK mining
index in the past two months on global growth concerns and a
firmer dollar.
"The reason for the mining shares being up today is better
trade data from China. We are seeing some cheap buying because
they have been badly hit over the last few weeks," John B Smith,
senior fund manager at Brown Shipley, said.
"But the message still is to stay underweight. We still
haven't have enough confirmation that the global growth
prospects are attractive and that China is completely out of the
woods. And we are not seeing any sustained recovery in commodity
and metals prices."
Weak European economic data and the winding down of the
Federal Reserve's monetary stimulus programme have hit global
equities over the past week. The IMF's member countries said on
Saturday bold action was needed to bolster the global recovery.
Underscoring the fragile nature of the European economy, S&P
on Friday lowered its ratings outlook on France.
At 1108 GMT, Britain's benchmark blue-chip FTSE 100 index
was up 0.4 percent at 6,363.76 points after falling
earlier to 6,294.54, its lowest level in 15 months. It has
fallen more than 8 percent in three weeks.
Charts pointed to further weakness and showed the FTSE's
next support was 6,023 points, its June 2013 low, after the
index broke out of an ascending trend started last year.
Airlines were supported by a further fall in Brent crude oil
prices, which dipped below $88 a barrel to their lowest in
almost four years after Middle East producers signalled they
would keep output high.
IAG, which owns British Airways and Iberia, and
easyJet rose 2.9 percent and 1.1 percent respectively.
Concerns about global growth hit chipmakers, with ARM
Holdings extending its previous session's fall, down 2
percent following a sales warning by Microchip Technology (NasdaqGS: MCHP - news)
last week.
(Additional reporting by Francesco Canepa, editing by John
Stonestreet)