UK Stocks to Capitalize on China’s Growth

Published Date : Jan 21, 2015

Buoyed by stocks in mining, top share index in Britain enjoyed a steady rise for fourth session in a row on Tuesday. The FTSE 100 index was up by 0.4% at 6,607.13 at 1548 GMT, registering rise for the fourth straight session. The development followed after the Chinese data beat expectations of investors in UK who were relieved to see China’s economy register growth at 7.4% in 2014, barely missing the target of 7.5%. Although, the data revealed slowest pace of economic growth in China in the last 24 years, but it came across as good news for traders who feared sharper slowdown. 

According to the industry insiders, higher demand is expected from top consumers in metal industry in China that will boost demand across mining companies such as Glencore and Anglo American by almost 3%.

According to sources, a number of factors incumbent in China’s economy acted in favor of UK’s stocks. For instance, the global miner Rio Tinto registered a meager rise of 0.7% following a production update. While iron ore production of the company met targets and copper came in a little below expectations. 

Director of trading at Guardian Stockbrokers said that, the number registered was slightly below their estimates, recording a relative underperformance yet the market in whole had overdone. The decline in energy stocks following steep fall in oil prices and growing concerns pertaining to global growth have emerged as the major factors responsible for sluggish growth rate in stock prices. 

According to the latest numbers recorded, Unilever dropped by 0.6% after reporting growth below expectations in underlying sales. Coca Cola Hellenic also witnessed a setback owing to its global exposure, thereby registering a drop of 5.2%. 

As revealed by market strategists, the emerging markets iterate a story of weak demand prevalent from Russia to Brazil.