The FTSE 100 has made a solid start to the new week, rising more than 1.3 per cent in early trades after China showed strength and Vodafone gave an update on the Verizon deal.
As of 0830 BST, the blue-chip index was 1.31 per cent up at 6,496.71 points, led by mining groups and Vodafone. The Euro Stoxx 50 was ahead 1.50 per cent at 2,762.13, while the Nikkei 225 closed 1.37 per cent higher at 13,572.92.
Investors took confidence from news that China’s official manufacturing purchasing managers’ index rose from 50.3 in July to 51 in August, reaching a 16-month high and easing fears that the world’s second largest economy is at risk of a sharp slowdown.
Natural resources company Vedanta Resources was the strongest gainer in early trades on the FTSE, rising 4.04 per cent to 1,209p on the hope of stronger economic growth in China. Fellow miners Anglo American, Rio Tinto and Glencore Xstrata also showed strong gains this morning.
Zhang Liqun, an economist at the Chinese government think tank Development Research Centre, says: “The PMI figure showed evident recovery in August, suggesting the economy is further stabilising. The improvement in all sub-indices also showed market expectations are turning better and companies are adapting to the changing business environment.”
Vodafone was the second strongest riser in the half-hour after the market opened, adding 3.86 per cent to reach 214.2p. The telecoms giant confirmed to the stockmarket that is “advanced discussions” with Verizon Communications about selling its stake in Verizon Wireless for $130bn (£83.6bn).