FTSE heads higher into the close

Heading into the close the FTSE 100 is up 70 points, as robust figures from China drives mineral extractors higher.

UK markets

The FTSE 100 is up 1% as mining stocks drag the UK benchmark higher, after Beijing revealed upbeat economic data on successive days, contradicting the view that the Chinese economy is about to decelerate quickly. Natural resource stocks are back in favour as China’s second wind could lead to an increased appetite for metals.

Banking stocks are also in the black as a combination of short covering and bargain-hunting kicks in, and now that the major banks have reported we may see less volatility next week.

US markets

US equities are broadly unchanged so far today as traders don’t know which way to turn in regards to QE tapering. On one hand, this week’s economic updates from the US haven’t been great, but a couple of members of the Federal Reserve have stated that tapering could begin as early as next month. The US reporting season is over and trading volumes are lower with many institutional investors on holiday, so it could be September before business picks up again.

Commodities

Gold is a touch lower as traders cash in their chips from yesterday’s rally, but the better-than-expected data from China overnight drove up the price of copper and stabilised gold.

FX

The pound is broadly unchanged after Bank of England governor Mark Carney's comments on Wednesday. By pegging UK monetary policy to the unemployment rate, the actions of the Bank have become a lot more transparent – jobless statistics speak louder than words. Despite cutting interest rates to yet another record low, the Australian dollar has gained ground as China way may be heading for a softer landing than was forecast before this week's data.

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