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FTSE 100 jumps as mining and insurance stocks rally

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·3-min read
A truck travels along a road at Los Bronces copper mine, about 60 km (40 miles) northeast of Santiago and 3500 meters above sea level, March 20, 2009. Chilean stater copper giant Codelco and global miner Anglo American Plc are seeking synergies between their Los Bronces and Andina copper mines, rich back-to-back deposits along the Andes mountain range in central Chile, Chile Mine Minister Santiago Gonzalez said on Friday. REUTERS/Ivan Alvarado (CHILE BUSINESS)
Mining stocks rallied on Tuesday. Photo: Ivan Alvarado/Reuters

The FTSE 100 outperformed other European stock markets on Tuesday, as insurers and mining stocks rallied.

London’s bluechip closed 1.5% higher on Tuesday. Mining stocks such as Glencore (GLEN.L), Anglo American (AAL.L), and Rio Tinto (RIO.L) rallied after better-than-expected Chinese industrial data overnight.

Insurance stocks also leapt higher after a judgement from the High Court on their liability for COVID-19 business insurance claims. While judges found partially in favour of businesses, major insurers RSA (RSA.L) and Hiscox (HSX.L) both said payouts were likely to be lower than their worst-case scenarios.

READ MORE: EU-China summit inches trade deal forward amid human-rights tensions

RSA rose 5.5% and FTSE 250-listed Hiscox was up more than 17%.

Ocado (OCDO.L) topped the FTSE after a bullish trading update. Separately, market research firms said the online grocery market was still growing strongly. The stock gained 10%.

Chinese data had set a positive tone for stock markets around the world from the get go in Europe. As well as bullish industrial production numbers, data from Beijing showed retail sales grew by 0.5% in August. That was ahead of forecasts.

“Traders are feeling confident that the economic data continue to improve for the second biggest economy of the world, China,” said Naeem Aslam, chief market analyst at Avatrade, said shortly before the open.

“The Chinese retail sales went back in the growth territory and this was the first time since the coronavirus pandemic.”

READ MORE: High Court ruling 'provides hope' for small firms on coronavirus insurance claims

The DAX (^GDAXI) ended the day up 0.2% in Frankfurt, France’s CAC 40 (^FCHI) was up 0.3%, the IBEX 35 (^IBEX) rose 1.2% in Madrid and the FTSE MIB (FTSEMIB.MI) gained 0.8% in Milan.

The pound rose 0.1% against the dollar (GBPUSD=X) and 0.2% against the euro (GBPEUR=X). The UK government’s controversial Internal Market Bill passed its first hurdle to becoming law late on Monday evening.

“The EU have given the UK until the end of the month to withdraw the relevant measures, but the UK government have shown no sign of backing down thus far, in spite of the fact that every former UK prime minister has now offered at least some criticism of the measures,” said Jim Reid, a senior strategist at Deutsche Bank.

“Having passed its second reading, the bill now goes into committee stage from today and carries in into next week, during which amendments can be made by MPs.”

Elsewhere in the UK, data published on Tuesday morning showed employers have cut 695,000 jobs since March, marking the highest rise in UK unemployment since the pandemic struck.

READ MORE: UK employers have cut 695,000 jobs since March as unemployment rate rises

Stocks rallied on Wall Street. The S&P 500 (^GSPC) was up 0.9% by the time trade ended in Europe, while the Dow Jones Industrial Average (^DJI) was 0.4% higher and the Nasdaq (^IXIC) had gained 1.4%.

Apple (AAPL) is to host an event later on Tuesday where it is widely expected to unveil new devices. The stock was trading 1.6% higher ahead of the event.

The Federal Reserve’s latest monetary policy meeting began on Tuesday, with an announcement due on Wednesday.

Asian stocks were mostly higher overnight, boosted by the better-than-forecast Chinese data. The Hong Kong Hang Seng (^HSI) rose 0.4%, the Shanghai Composite (000001.SS) gained 0.5%, and the Shenzen Component (399001.SZ) rose 0.9%. Japan’s Nikkei (^N225) slipped 0.4% and Australia’s ASX 200 (^AXJO) was flat.