LONDON MARKETS: FTSE 100 Steps Higher, But Miners Slip On China Worries

By Carla Mozee, MarketWatch Features Dow Jones Newswires

Aviva's rise helps insurers find firmer footing

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U.K. stocks turned higher Monday, aiming for a gain after two days of losses, even as mining shares fell under the weight of concerns about the health of Chinese companies.

Insurers got a boost after a report that Aviva PLC is ready to launch a share buyback.

How markets are moving: The FTSE 100 index flipped up 0.3% to 7,4131.67 after opening slightly lower. Only the basic materials and tech sectors were losing ground. On Friday, the London benchmark lost 0.1% but logged a weekly rise of 0.4% (http://www.marketwatch.com/story/european-stocks-gain-ground-as-german-business-sentiment-strengthens-2017-11-24) to snap a two-straight run of weekly losses.

The pound changed hands at $1.3347, up from $1.3332 late Friday in New York. Sterling picked up 0.9% against the U.S. dollar last week, according to FactSet data.

What's moving markets: Most mining shares started the week in the red in London. The sector logged losses on Asian markets as bond yields climbed and as Beijing kept up its crackdown on so-called shadow banking.

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Higher yields on debt would increase borrowing costs for companies. Chinese stocks stumbled Monday, with the Shenzhen Index losing 1.6%.

Mining stocks are sensitive to developments in China, as companies there a big buyers of industrial and precious metals such as iron ore, copper and gold.

What strategists are saying: European stocks opened lower "as fears grow that Chinese equities could be starting one of their downward legs, which may cause fright for global investors," said Rebecca O'Keeffe, head of investment at Interactive Investor.

"Chinese equity markets are notorious for delivering a volatile ride for investors, who have become used to boom and bust periods. The China effect is especially significant for commodity markets and by extension the metal-and-oil heavy FTSE 100," said O'Keeffe in a note.

Stock movers: Among miners, Fresnillo PLC (FRES.LN) and Antofagasta PLC (ANTO.LN) shares fell 0.6% each, and Glencore PLC (GLEN.LN) lost 0.2%. But Randgold Resources PLC (RRS.LN) pulled higher by 0.5%

Aviva PLC (AV.LN) pushed up 2.6% after a Sunday Times report (https://www.thetimes.co.uk/article/aviva-boss-mark-wilson-to-reveal-insurer-is-spending-1bn-on-its-own-shares-j8r9kz233)that the insurance company is preparing to say it will spending more than GBP1 billion to buy back its shares and signal repayment of expensive bonds.

Shares of other insurance companies rose, with Legal & General PLC (LGEN.LN) up 1% and Prudential PLC (PRU.LN) higher by 1.3%.

(END) Dow Jones Newswires

November 27, 2017 04:56 ET (09:56 GMT)