UK stocks rise after China pledges more stimulus

The domestic-focused midcap index rose 0.8 per cent and the personal goods index 5.7 per cent

UK stocks rose on Thursday, boosted by mining stocks after China's latest pledge for more policy measures fuelled optimism for a turnaround in the world's second biggest economy, while a drop in oil-related stocks limited gains.

The blue-chip FTSE 100 added 0.5 per cent by 0720 GMT.

China will deploy "necessary fiscal spending" to meet an economic growth target of around 5 per cent, leaders pledged, following a raft of aggressive central bank policy easing measures earlier in the week.

That followed a report that China is considering injecting up to 1 trillion yuan ($142.39 billion) of capital into its biggest state banks. The moves signal renewed efforts to turnaround growth and demand in the world's second biggest economy.

UK stocks slid on Wednesday as investors questioned whether the scope of China's proposed measures were sufficient, but the newly-announced fiscal stimulus seemed to have soothed those concerns.

The index tracking industrial metal and mining companies climbed 4 per cent as copper prices rallied.

However, an index of oil and gas stocks declined 4 per cent, as crude prices plunged more than 2 per cent following a report that Saudi Arabia is preparing to abandon its unofficial price target of $100 a barrel as it prepares to raise output.

Among single movers, shares of Watches of Switzerland climbed 4.7 per cent after Deutsche Bank upgraded the stock to "buy" from hold and raised its price target.

Burberry shares gained 6.5 per cent on hopes of renewed demand in the Chinese market.

These moves also lifted the domestic-focused midcap index 0.8 per cent and the personal goods index 5.7 per cent.