UK Stocks Climb Amid China's Fresh Fiscal Measures

UK stocks rallied on Thursday, driven by the mining sector amid China's new policy measures to boost its economy. The FTSE 100 rose by 0.5% as China pledged significant fiscal spending. Gains were tempered by declines in oil stocks, while individual companies like Watches of Switzerland and Burberry also saw significant increases.

UK stocks saw an uptick on Thursday, bolstered by mining stocks after China's recent commitment to more policy measures sparked optimism for an economic rebound in the world's second-largest economy. However, declines in oil-related stocks kept the gains in check.

The blue-chip FTSE 100 index advanced by 0.5% by 0720 GMT. China's leadership pledged "necessary fiscal spending" to achieve an economic growth target of around 5%, following aggressive central bank policy easing measures earlier in the week.

In a further sign of China's commitment, reports indicated plans to inject up to 1 trillion yuan ($142.39 billion) into its major state banks. These moves suggest renewed efforts to revive growth and demand in the global economic powerhouse. Although UK stocks dipped on Wednesday due to skepticism about the sufficiency of China's proposals, the new fiscal stimulus appears to have allayed those concerns.

The industrial metal and mining companies index surged by 4% as copper prices climbed. Conversely, the oil and gas stocks index fell by 4%, with crude prices dropping over 2% following reports of Saudi Arabia potentially abandoning its unofficial $100-a-barrel price target in anticipation of boosting output.

Among individual movers, Watches of Switzerland shares rose by 4.7% after Deutsche Bank upgraded the stock to "buy" from "hold" and increased its price target. Burberry shares surged by 6.5% on hopes of heightened demand in the Chinese market.

These developments also lifted the domestic-focused midcap index by 0.8% and the personal goods index by 5.7%. Investors were also attentive to upcoming speeches from Federal Reserve officials, including Chair Jerome Powell, for further insights into U.S. monetary policy.

On the domestic front, a British Retail Consortium survey revealed growing consumer pessimism in the UK over the past month, following the new Labour government's removal of a welfare benefit for pensioners and warnings of potential tax hikes in next month's budget.

(With inputs from agencies.)