FTSE continues winning streak with miners lifted by China rate cut

Leading shares are continuing their record breaking run, buoyed by a rise in mining shares after China cut interest rates over the weekend.

The move by the Chinese central bank came amid concerns about a slowdown in the country’s economy although the latest HSBC purchasing managers index showed the factory sector edged to a seven-month high in February although exports fell back.

Meanwhile, with another mixed picture from the eurozone economy, investors are also awaiting the European Central Bank’s proposed quantitative easing programme to begin this month.

So the FTSE 100 has added 22.26 points to 6968.92, a new intra-day high. Alastair McCaig, market analyst at IG, said:

China has done its best to start the week off on a positive note with its slightly better-than-expected manufacturing figures and the Chinese central bank’s decision to cut interest rates by 25 basis points. This cut sees China reduce interest rates down to 5.35% and become the 17th nation to cut rates this year.

Expectations are also high that Australia will cut its rates again tomorrow. However, somewhat less cheerily, this action does point towards the Asian powerhouse cutting its growth rate outlook down to 7% for the year ahead. Although pre-market calls had pointed to a soft open, the FTSE has quickly shaken off this malaise and again looks to be threatening the 7000 level.

Among the mining shares, Anglo American has added 22p to £12.32 while Glencore has climbed 5.4p to 305.65p, helped by Credit Suisse raising its recommendation from neutral to outperform. The bank said:

We see two key drivers: 1) underlying free cash flows are the strongest from the peer group due to the stability and high cash generation of marketing; 2) we have a strong preference for Glencore’s copper and zinc exposure, and coal margins appear to have bottomed.

Elsewhere Intertek is up 117p at £26.47, the biggest riser in the leading index, after the testing equipment group made positive noises about the outlook following a 4.7% fall in full year profits to £300.2m. It recommended a 6.7% dividend rise and said it expected organic revenue growth to improve gradually during 2015:

Looking further ahead we expect the near-term negative headwinds in our oil and gas capex business to ease. Intertek is well placed to deliver mid-single digit organic revenue growth over the medium term, supplemented by growth from acquisitions.

But another dip in the oil price - Brent crude is currently down 0.58% at $62 a barrel - Tullow Oil is down 6.8p at 380.5p. Weir, which supplies equipment to the oil sector, has fallen 24p to £16.80, while Royal Dutch Shell B shares are 22p lower at 2183.5p.

Among the mid-caps, Afren has added 19% to 10.24p after it agreed a further deferral of a $50m debt payment until the end of this month, and said it was in constructive discussions with its largest bondholders about its immediate liquidity and funding needs.