Sector movers: Miners, insurers lead London market higher

Uptick in mining, metals, insurance and financial stocks pulled the London market higher on Tuesday, as China’s trade data while downbeat, was not as bad as forecasters had feared.

The figures painted a mixed picture, as Chinese exports declined by 5.5% in dollar terms compared to the same month last year, better than consensus for a 6.6% fall and further decelerating following a decrease of 8.3% in July.

Imports from abroad were much weaker, with purchases decreasing at a significant 13.8% year-on-year rate in dollar terms, far exceeding the 7.9% consensus and the fall of 8.1% in July, casting some further doubt on domestic demand. This left the trade balance surging to a $60.24bn surplus, larger than the $48bn estimated and the previous $43.0bn.

The FTSE 100 rose 1.18% or 71.58 points to 6,146.10, while the FTSE 250 was up 0.94% or 157.76 points at 17,000.28, with mining stocks responding in kind as base metal futures continued to firm up on the London Metal Exchange.

Extending marginal gains achieved during the previous European session, past the midway point of trading on the LME, three-month delivery contracts of primary aluminium (up 0.03%), copper (up 1.6%), lead (up 1.0%), nickel (up 0.5%), tin (up 1.6%) and zinc (up 1.2%) were all in positive territory.

Of all base metal contracts, gains posted by copper were the strongest. Traders attributed the base metal uptick to commodities major Glencore’s announcement of cost cuts on Monday. The company specifically said copper production at its Katanga and Mopani prospects in Democratic Republic Congo and Zambia maybe cut in response to the "challenging environment."

Predictably, Glencore led the blue chips higher ending the session up 5.80p or 4.40% at 137.60p as it continued to benefit from announced debt reduction measures, seeking to cut its $30bn debt pile. The company also said it intends to issue up to $2.5bn in new shares, cut its dividend, sell some assets and dispose of its stake in its agricultural business.

Peers Anglo American (up 3.87%) and Fresnillo (up 2.74%) joined Glencore among the FTSE 100 risers. However, midcap miners continued to struggle with Lonmin (down 4.84%) and Petra Diamonds (down 3.69%) ending up among the biggest fallers on FTSE 250.

Financial stocks generally performed well with Aberdeen Asset Management (up 3.02%) and Standard Chartered (up 2.82%) also among the leading FTSE 100 stocks. However, the story of the day belonged to the insurance sector, as RSA Insurance (up 0.20%) signed contracts to sell its operations in Latin America to Suramericana SA, the insurance subsidiary of Grupo de Inversiones Suramericana, for around £403m in cash.

Concurrently, FTSE 250 constituent Amlin (up 32.99%) agreed to a £3.47bn takeover by Japan's Mitsui Sumitomo Insurance Company. Under the terms of the deal, Mitsui will pay 670p a share for Amlin, whose shareholders will be eligible for an 8.4p per share dividend on 1 October.