FTSE 100 climbs to new highs on China data

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The benchmark index has had its best start to a year since 1989.

It may have been distinctly cold outside, but the sight of the FTSE 100 (FTSE: ^FTSE - news) reaching its highest close of 2013, and posting its best start to a year in more than two decades, would have warmed the spirits of many investors.

London’s benchmark index climbed 22.05 points to 6,154.41 today, bringing its gain for 2013 to 4.4pc the biggest rise over the first half of January since 1989, according to Peel Hunt strategist Ian Williams. While the blue-chip index is currently at its highest since May 2008, the mid-cap FTSE 250 again hit a new record high and closed up 98.51 at 12,946.12.

Traders were enthused at the beginning of the year by a compromise deal on the US “fiscal cliff”, the spending cuts and tax rises that threatened to push the country into recession. By and large, investors have remained relatively positive ever since, with encouraging Chinese economic data adding to the market’s confidence today.

The news from China, the world’s biggest consumer of industrial metals, helped mining shares, with steelmaker Evraz leading the blue-chip risers with a gain of 13 to 304.4p, despite the company reporting a 5pc fall in crude steel production last year.

Elsewhere in the London market, some were hoping the snowy weather would give a lift to motor accident management group Helphire .

Shares in the small-capper, which provides cars for motorists involved in accidents, put on 0.2 7pc to 3.07p, with traders speculating the recent cold snap would increase demand for the company’s services. Helphire said in November (Xetra: A0Z24E - news) that the winter has a “significant weighting” in its trading.

Back with the blue chips, analysts at Barclays (LSE: BARC.L - news) made the case for aircraft component supplier Meggitt (Other OTC: MEGGF - news) and lifted their recommendation on the shares to “overweight” from “equal weight”. They said the company had “a number of attractive businesses, all with high margins” and noted that the group’s healthy balance sheet should enable Meggitt to chase attractive acquisitions or return more cash to investors. As a result of the positive write-up, shares in the company climbed 6.2 to 437.2p.

B&Q owner Kingfisher (LSE: KGF.L - news) was weak in the wake of Home Retail’s trading update on Thursday, which showed a 3.9pc fall in like-for-like sales at peer Homebase in the 18 weeks to January 5. Panmure Gordon analyst Philip Dorgan downgraded his Kingfisher forecasts for 2013 and 2014 on concern “the consumer will batten down the hatches in the first few months of the year”. Kingfisher was the heaviest faller on the FTSE 100 with a decline of 12.2 to 272.9p.