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Commodity stocks boost FTSE 100, Mulberry soars on strong earnings

FTSE 100 at one-week high as oil prices boost BP, Shell
FTSE 100 at one-week high as oil prices boost BP, Shell   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p>By Bansari Mayur Kamdar</p> <p> -UK’s <span class="caps">FTSE</span> 100 rose for a third consecutive day on Wednesday, led by energy majors and miners, while leather bag company Mulberry jumped on strong earnings as demand for its luxury products returned to pre-pandemic levels.</p> <p>The commodity-heavy <span class="caps">FTSE</span> 100 gained 0.3% after hitting one-week highs earlier in the session.</p> <p>BP and Royal Dutch Shell rose over 1% each with crude prices inching up as investors questioned the effectiveness of a U.S.-led release of oil from strategic reserves. [O/R]</p> <p>Miners added 0.5%, supported by higher copper prices after China’s latest announcement it will relax its fiscal policy and support the debt-laden property sector eased some concerns about Chinese demand. [MET/L]</p> <p>The <span class="caps">FTSE</span> 100 index has added 13.1% this year, but continues to underperform its European peers with supply chain worries and inflationary pressures capping its gains.</p> <p>“The valuations on UK stocks continue to be very cheap relative to both global and U.S. markets,” said Oliver Blackbourn, portfolio manager at Janus Henderson Investors.</p> <p>“It’s the <span class="caps">ESG</span> factor. People can see the inflationary benefits of owning materials and energy stocks and if you’re worried about higher interest rates, UK has a lot of financials, but that is not something you want from an <span class="caps">ESG</span> perspective.”</p> <p>Mulberry soared 19.5%, as per prices on Google Finance, after reporting demand for its luxury products was back at pre-pandemic levels with sales in the UK and Asia powering a 34% surge in first-half revenue.</p> <p>The domestically focused mid-cap index fell 0.1% weighed by weakness in healthcare and consumer discretionary stocks.</p> <p>Among decliners, <span class="caps">IQE</span> Plc, which makes semiconductor wafers for chips, slumped 24.3% after it forecast lower annual profit margin and revenue.</p> <p>Asset manager Brewin Dolphin slid 6.1% after warning of market volatility ahead, as government support measures unwind and consumer demand falls back into normal levels.</p> <p>Genetics company Genus sank 10.8% after the company cut its profit guidance on downturn in China.</p> </div>