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Strong miners spur FTSE after firm China data

Published 09/01/2010, 04:27 AM
Updated 09/01/2010, 04:36 AM

* FTSE 100 up 0.4 percent

* Miners supported by firmer metals prices

* TUI Travel up; TUI AG mulls outright purchase - report

By Tricia Wright

LONDON, Sept 1 (Reuters) - Strong mining stocks boosted Britain's top share index early on Wednesday, as firm economic data from China helped stifle persistent concerns about the health of the global economy.

By 0812 GMT, the FTSE 100 was up 18.10 points, or 0.4 percent, at 5,243.32, after it gained 0.5 percent on Tuesday to close at 5,225.22.

Miners added the most points to the index as metals prices rose, buoyed by optimism about China's manufacturing base after positive purchasing manager data.

China's official purchasing managers' index rose to 51.7 in August from 51.2 in July.

Fresnillo was the best off, adding 3.2 percent, while Kazakhmys and Xstrata also notched up solid gains, both climbing 1.7 percent.

"What we're seeing is edgy optimism this morning," said Giles Watts, head of equities at City Index.

"People (are) coming back from the summer and what we're seeing this week is people taking a slightly longer term view and looking at sectors as a whole that might push us better in the coming months," he said, pointing to the reweighting towards miners.

Telecoms firms gave the index a lift, boosted by Vivendi, Europe's largest telecom and entertainment group, which raised its annual profit targets after posting first-half forecast-beating results.

Inmarsat put on 1 percent, while Vodafone was 0.1 percent firmer.

TUI Travel topped the blue-chip leader board, rising 4.4 percent. German parent TUI AG, Europe's biggest tour operator, is considering buying the shares it does not already own in its British unit to refocus on tourism, Financial Times Deutschland reported.

TUI Travel also went ex-dividend on Wednesday.

Land Securities was another good gainer, up 1.4 percent, after JPMorgan Cazenove named the property company its top large cap pick and raised its rating on the stock to "overweight" from "neutral".

Investors will watch UK manufacturing PMI data for August, due at 0828 GMT, for more clues on the state of the British economy. A poll of economists forecast the figure at 57.00 up from 57.30 the previous month.

U.S. data being watched will include U.S. ADP National Employment statistics ahead of non-farm payrolls due out on Friday. Construction spending and ISM manufacturing PMI will also be in focus, when they are released at 1400 GMT. (Editing by Karen Foster)

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