* FTSE 100 up 2.37 points, best close since January 23
* Miners bolstered by robust Chinese trade data
* Technical analysts upbeat on near-term FTSE outlook
By Tricia Wright
LONDON, Feb 12 (Reuters) – Britain’s top share index reached a three-week closing high on Wednesday, buoyed by miners, after top metals consumer China reported robust trade data.
Mining (LSE: MIR.L – news) companies are recovering from a sharp decline in 2013, after a sector-wide drive to offset falling metals demand with cuts in spending. They got a boost on Wednesday from the fresh evidence that the Chinese economy is stabilising.
The UK mining index, up 1.1 percent, hit a three-month high on Wednesday after Chinese exports and imports beat expectations in January.
“Economic data from China is providing a lift to the mining sector, easing fears with regards to a potential slowdown in commodity demand,” Keith Bowman, equity analyst at Hargreaves Lansdown, said.
The health of the Chinese economy is a key factor for the FTSE 100, given the mining sector’s heavy weighting. It is the fifth biggest sector on the UK benchmark, accounting for around 8 percent of the index, Thomson Reuters (Frankfurt: TOC.F – news) data shows.
The sector has got off to a solid start this year, up nearly 6 percent, against a 1.1 percent drop on the FTSE 100.
“We expect the miners to continue to perform well in the immediate short term, as the market focuses on better cashflow from volume growth, weaker FX, cost reductions and capex cuts,” Goldman Sachs (NYSE: GS-PB – news) said in a note.
The blue-chip FTSE 100 index ended up 2.37 points – flat in percentage terms – at 6,675.03 points, marking its sixth straight day of gains.
The market showed little reaction to comments from Bank of England Governor Mark Carney and other British monetary policymakers at a news conference after the Bank published its quarterly Inflation Report.
“It’s pretty much steady as she goes,” CMC Markets senior market analyst Michael Hewson said. “He’s reiterated the low interest guidance, and as such I think markets have acted fairly benignly towards that.”
The FTSE 100 index has rebounded from its December lows, which have acted as the springboard for a decent bounce, lifting the index above its 50-day moving average.
Bill McNamara, a technical analyst at Charles Stanley (LSE: CAY.L – news) , said the short-term outlook remains encouraging, with most indicators pointing towards further gains. His next upside target for the index is at 6,750 points.