Mining, oil and Asia-focused financial stocks helped the FTSE 100 regain its footing this morning as optimism resumed on a potential shift in China’s zero-Covid policy, which has sparked mass protests in the country.

The main index was up 0.6%, or 47 points, at 7,521 after police clamped down on demonstrations that erupted over the weekend in response to China’s zero-tolerance approach to coronavirus and its strict lockdown rules.

Officials have come out with efforts to address the rising dissent, saying in a briefing today the government will speed up Covid-19 vaccinations for elderly people.

Prudential (PRU), which has large exposure to Asia, led the blue chips higher, with the insurer’s shares up 4.7%, or 43p, at 972p, while banking group Standard Chartered (STAN) added 2.4%, or 14p, to trade at 593p.

That built on a bounce in Asian markets earlier, with Hong Kong Hang Seng index closing 5.2% higher.

Concerns that the protests would further hamper China’s recovery and slow demand for commodities had put pressure on miners and energy names but a rebound late yesterday gained further traction today:

• Rio Tinto (RIO) was up 3.2%, or 176p, at £55.39;
• Anglo American (AAL) rose 2.9%, or 94p, at £32.66;
• Shell (SHEL) gained 1.4%, or 35p, at £23.95;
• And BP (BP) rallied 1.4%, or 7p, at 490p.

The commodity sector’s rebound has helped the FTSE 100 stay just in positive territory for the year to date, with the index up just under 2% in 2022 while global markets have flagged. The S&P 500 has sunk nearly 17% in dollar terms.

Susannah Streeter, analyst at Hargreaves Lansdown, said: ‘Police in China have quashed mass Covid-19 demonstrations for now, helping stocks regain their footing on indices across Asia, setting the tone for a positive open in Europe.

‘But with the strict Covid-19 policy continuing there is every chance protests will bubble up again, adding another layer of complication for an economic recovery.’

The FTSE 250 was less buoyant, ticking 4 points lower to 19,287. The mid-cap index was pulled lower by an outsize fall from John Wood (WG), which tumbled 14.3%, or 22p, to 136p after reporting that trading for the first 10 months of the year was in line with expectations and reiteratinh guidance for the year.

The company outlined a new strategy, with a focus on markets such as oil and chemicals, and said it was taking ‘a more focused approach to growth’. However, the update failed to excite analysts, with JPMorgan cutting its target price from 262p to 237p on the stock.

China trusts rallied on the news from Beijing with Baillie Gifford China Growth (BGCG ) jumping 5.7% to 250.8p and JPMorgan China Growth & Income (JCGI ) advancing 4.8% to 326.3p. Fidelity China Special Situations (FCSS ) rose 2.3% to 215p.

It was followed by Schroder Oriental Income (SOI ) up 2% at 144p, Templeton Emerging Markets (TEM ) up 1.9% at 144p, and Vietnam Enterprise Investments (VEIL ) up 1.7% at 573p.

Also in favour was Sirius Real Estate (SRE ), up 3.4% to 84.7p, unlike Seraphim Space (SSIT ) which shed 3.1% to 49.2p.  

Investors saw the bright side of Atrato Onsite Energy (ROOF ) delaying its target for full investment to the second quarter of next year and for reporting a 5.4% loss since launch a year ago. The shares rose 3.4% to 82.2p.