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FTSE 100 gains in buoyant trade as China lifts the mood

The FTSE 100 was on the front foot on Monday as the mood around China improved, helping to lift mining companies which were also boosted by a rally in precious metals.

London’s leading index was 0.25% higher at 8,441 at the time of writing.

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“Investors have plenty to keep them occupied, with geopolitical uncertainty butting up against China growth hopes and a few domestic nerves ahead of Wednesday’s inflation figures,” says AJ Bell head of financial analysis Danni Hewson.

“Optimism still seems to be the primary driving force with mining stocks up significantly after copper prices hit fresh record highs, thanks in part to new measures designed to prop up China’s ailing property sector.”

Precious metal prices also helped the case for the FTSE 100’s miners as worries about Iran sent gold to a record high.

“Nervousness about the direction of geopolitics has pushed gold to fresh record highs, reaching $2,438 per ounce. Demand for the safe-haven asset has surged as investors have been digesting news of the death of Iran’s President Ebrahim Raisi who is believed to have been killed with others including foreign minister Hossein Amir-Abdollahian in a helicopter crash,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

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“Demand for the metal has also likely to have been pushed up by renewed speculation that the Federal Reserve will be minded to cut interest rates a couple of times this year.”

Interest rate expectations have been the core driver of precious metals in 2024 seeing gold consistently break to fresh highs.

Fresnillo was the FTSE 100’s top gainer as the silver-focused miner tracked prices higher. Fresnillo was up 4.2% at the time of writing.

Glencore added 1.6% and Antofagasta ticked 0.8% higher as copper prices rose.

Rolls Royce shares added 2.4% and the rip-roaring bull run looked to remain intact as the stock bounced of a key trend line.

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