FTSE 100 moving toward first rise in 11 sessions

U.K. stocks climbed Tuesday, with gains for BHP Billiton PLC and RSA Insurance Group PLC helping the British blue-chip benchmark pare some of the steep losses it suffered during Monday’s selloff.

The FTSE 100 UKX, +2.46% rose 3.3% to 6,092.98 after China’s central bank, during late-morning European trade, said it would cut its benchmark interest rates. It also said the reserve requirement ratio for banks is being lowered by 0.5 percentage point. The moves will go into effect Wednesday.

“Simultaneous interest rate and RRR moves are unusual – a sign that policy makers want to deliver a strong message,” said Mark Williams, chief China economist at Capital Economics, in a note.

A close higher for the FTSE 100 would be the index’s first in 11 sessions. The 10-session losing streak notched Monday was the longest since 2003.

Stocks world-wide sank Monday, shaken by worries among investors about a slowdown in China, a major buyer of metals and the world’s second-largest oil consumer. Commodity producers make up one-fifth of the FTSE 100’s weighting.

The People’s Bank of China earlier Tuesday injected more cash — 150 billion yuan ($23.40 billion) — into the country’s financial system. But Chinese shares continued to fall, pushing the Shanghai Composite SHCOMP, -7.63%  to close down 7.6%.

China’s cut in benchmark rates and the reserve requirement ratio “may halt the market slide but we suspect the primary motivation is to shore up confidence in the state of the wider economy,” Williams wrote. “It is notable that, in the two days prior to this move, official purchases of equities seem to have halted.”

The FTSE 100 on Monday was knocked back 4.7% and marked its lowest level since December 2012. The drop erased £86 billion ($135 billion) in market value.

Miners: Randgold Resources Ltd. RRS, -2.10% GOLD, +1.09%  was the only FTSE 100 member whose shares were losing ground Tuesday, down by 0.3% as prices for gold GCZ5, -0.70%  dipped.

Meanwhile, other miners listed in London found some relief after Monday’s rout. BHP Billiton BLT, +3.88% BHP, +4.07% BHP, +1.97%  shares climbed 6.5%, after the world’s largest miner by market value raised its full-year dividend payout by 2% to $1.24 a share. The decision came even as the company’s annual profit sank 86% to $1.91 billion during a slump in commodity prices

Antofagasta PLC ANTO, +5.53% shares climbed 6.8%, with the copper producer posting a rise in first-half net profit to $706 million and backing its revised full-year output forecast.

Shares of mining and commodities trader Glencore PLC GLEN, +3.99% GLCNF, +4.00%  were up 7.3%, winning back the bulk of Monday’s 13% slide, and iron-ore producer Anglo American PLC AAL, +2.59%  picked up 5.3%.

Meanwhile, RSA Insurance RSA, +4.55%  shares popped up 4.6% after the insurer said it has received a revised buyout offer from Zurich Insurance Group AG ZURN, +2.15% that values RSA at around £5.63 billion ($8.83 billion). RSA said it is willing to recommend the offer to its shareholders.

Source: Market Watch