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FTSE lifts on hopes of a Chinese reopening

London listed mining giants soared on Tuesday amid hopes that Chinese markets might open up if the country slowly abandons its zero-Covid policy.

The FTSE 100 jumped on the day, lifted by its natural resources giants, and a strong performance from Ocado.

By the end of the day it closed at 7,186.16, a 1.3% or 92 point rise, after briefly peaking at 7,221, higher than before the now largely reversed mini budget in late September.

“European markets initially raced out of the traps in early trade after Asia markets rallied strongly on unconfirmed reports that China was looking at a plan for the unwinding of its current zero-Covid strategy,” said CMC Market analyst Michael Hewson.

“While this might come across as wishful thinking for the most part, Chinese authorities will have to relent on this policy at some point, although it’s unlikely to happen much before March next year. “

But he also warned that an opening in China would likely push up inflation around the world as the economy starts gasping for oil and gas, driving up prices.

“In a way it would be better for the inflation narrative if Chinese demand were to stay weak throughout the winter months,” Mr Hewson said.

In Germany the Dax index gained 0.6% while France’s Cac 40 closed up 0.9%.

In New York however things looked less positive.

The S&P 500 was trading down 0.4% and the Dow Jones had dropped 0.3% shortly after trading ended in London.

The pound dropped 0.1% trading at around 1.145 dollars, and added 0.1% to buy 1.161 euros.

In company news the oil giant BP revealed that profits more than doubled in the last quarter compared to a year earlier, similar to the results for rival Shell last week.

The company said that underlying replacement cost profit reached 8.2 billion US dollars (£7.1 billion) up from 3.3 billion dollars a year ago.

Analysts had only expected it to hit 6.1 billion dollars.

Shares in the company rose by 1.4% on Tuesday.

The day was more concerning for investors in where around 700 jobs are at risk as the business lined up administrators.

The business said that its operating arm has lined up PwC and filed a notice to appoint administrators.

It has 10 days to try to find a way to avoid collapse.

Options could include selling parts of the business, including the Made brand.

Shares are suspended so did not react to the news.

The biggest risers on the FTSE 100 were Ocado, up 191.4p to 664p, B&M, up 17.5p to 340.25p, Anglo American, up 132.5p to 2,740.25p, Rolls-Royce, up 3.43p to 81.62p, and Glencore, up 20.6p to 520.05p.

The biggest fallers on the FTSE 100 were Rentokil, down 23.4p to 521p, Experian, down 86p to 2,688p, Relx, down 53p to 2,288p, Croda, down 64p to 6,696p, and BT, down 1p to 128.9p.