A SURGE for Asian stock markets after China ended its currency’s two-year peg to the dollar caused the FTSE 100 Index to jump by more than 1% today.
Mining stocks were at the forefront of the rally in London as the Footsie extended its recent improvement with a gain of 74.2 points to 5325.1.
Investors in Asia were given a confidence boost by Beijing’s surprise move to determine its exchange rate from multiple currencies. The yuan has been pegged to the US dollar since the global financial crisis took hold in 2008, causing friction with countries who say it is undervalued for China’s own benefit.
The move raised expectations of a boost to crude imports by China, causing oil prices to rise by more than 1% to around 78 US dollars a barrel.
This was positive news for Royal Dutch Shell, which climbed 35p to 1786p, but BP continued to struggle after it emerged the beleaguered oil giant planned to raise 50 billion US dollars (£33.7 billion) to cover the cost of the Gulf of Mexico oil spill. On the day that BP’s first quarter dividend should have been paid to shareholders, the stock slipped another 3%, or 10.05p to 347.35p.
Elsewhere, shares in Supernanny television producer Shed Media were 5% higher, up 4p at 82p, after it confirmed it was the subject of takeover interest from US media giant Time Warner.