UPDATE 1-FTSE gains on upbeat China data, softer pound; Ted Baker slips

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* FTSE 100 up 0.6%, FTSE 250 up 0.2%

* China data spurs miners, oil stocks

* Pound weaker as Conservative lead narrows

* Ted Baker falls to lowest in more than a decade

* Ocado slips after bond issue (Adds news items, analyst comments, updates share prices)

By Shashwat Awasthi

Dec 2 (Reuters) - London's FTSE 100 bounced on Monday after a near 1% drop in the previous session, as upbeat manufacturing activity from China - the world's second-largest economy - boosted sentiment, while retailer Ted Baker slid on overstated inventory.

The FTSE 100 advanced 0.5% by 0945 GMT. An index of miners surged 1.6%, while oil majors Shell and BP added more than 1% each.

The gains owed much to surveys of China's factory activity, which beat forecasts with one showing the quickest pace of expansion in almost three years in November.

Exporter stocks, including Durex condom maker Reckitt Benckiser, firmed as the pound began the week on the back foot after polls showed a tightening UK election race.

A clutch of polls showed Prime Minister Boris Johnson's Conservative Party losing some of its lead ahead of the Dec. 12 election, adding uncertainty.

The polls tempered investor sentiment at home, leaving the mid-cap FTSE 250 with modest gains of 0.2%. The index had leapt almost 4% last month on hopes of a Tory victory that would clear the way for Brexit.

Ted Baker slipped as much as 10% to its lowest level since March 2009 after the retailer said it may have overstated inventory by as much as 25 million pounds ($32.08 million).

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DATA COOLS TRADE FEARS

The latest data out of China set the tone for currency markets, and came as a relief to markets that are cautious of the impact any fallout from Beijing's trade war with Washington will have on the global economy.

Sticking points still remain in trade negotiations. According to news website Axios on Sunday, a trade deal between the United States and China was now "stalled because of Hong Kong legislation".

China's Global Times newspaper also reported last night that Beijing's top priority in a preliminary deal was the removal of existing tariffs.

Story continues

"It is hard to see the U.S. swallowing a very bitter trade pill like that ... It is now becoming more apparent why the talks have dragged on so long," OANDA analyst Jeffrey Halley said.

Online grocer and technology company Ocado missed out on the main index's rally, as it shed almost 6% after launching a bond issue, partly to fund construction of robotic warehouses for overseas partners.

Precious metals miner Fresnillo also underperformed, hit by a double whammy of lower gold prices amid demand for risky assets and after narrowing its annual production forecast range.

Mid-cap Tullow Oil jumped 5% on reports that the company had agreed to sell stake in its Ugandan oil fields.

($1 = 0.7794 pounds) (Reporting by Shashwat Awasthi in Bengaluru; Editing by Sherry Jacob-Phillips)

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