FTSE CLOSE: Index jumps as China services sector bounces back from covid crisis

The FTSE-100 Index is expected to open 60 points higher at 6280, according to prices from CMC Markets

REUTERS

3 June 2020

UK shares jumped on Wednesday after surprisingly strong data on the Chinese economy gave rise to hopes for a worldwide bounceback from the covid crisis.

The Chinese services sector rebounded in May to show a near-10-year high as domestic demand recovered from the lockdown there. The Chinese Purchasing Managers Index on the sector, in which anything above 50 represents growth, jumped from 44.4 in April to 55.0. The index had been under 50 for three months due to the coronavirus epidemic.

A renewed expansion of activity had greeted the end of lockdown across the country - a pattern that could bring optimism that the UK and other major economies will follow suit in the coming months.

The FTSE-100 Index closed up 162.27 points at 6,382.41 points.

International Consolidated Airlines Group, an Anglo-Spanish multinational airline holding company, soared 11.41%, the top gainer of the blue chips. Rolls-Royce Holdings and easyJet increased by 9.25% and 8.25%, respectively.

Polymetal International, a precious metals mining company, was the worst performer in the blue chips, with its shares losing 6.58%. Fresnillo, a Mexican-based precious metals mining company, dropped 5.90 percent. Hargreaves Lansdown, a financial service company, fell 3.09%.

Paragon Banking Group had a good day after Investec upped its price forecast from 415p to 430p. The lender is in the middle of shifting towards commercial banking and away from buy-to-let. Investec praised its resilient returns on equity although said it preferred OneSavings Bank as its top stock in the sector. Paragon and OneSavings both jumped 2%.

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