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Commodity stocks drive FTSE 100 to more than one-week high

Shell, miners lift FTSE 100 ahead of U.S. jobs report
Shell, miners lift FTSE 100 ahead of U.S. jobs report Copyright Thomson Reuters 2023
Copyright Thomson Reuters 2023
By Reuters
Published on Updated
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By Boleslaw Lasocki

-UK's FTSE 100 ended at a more than one-week high on Monday, as an easing of COVID restrictions in China and the prospect of global infrastructure funding brought relief to commodity prices, lifting shares of major oil and mining companies.

The commodity-heavy FTSE 100 rose 0.7% and hit its highest closing level since June 16, while the domestically focused mid-cap FTSE 250 index advanced 1.0%.

Risk sentiment improved as easing COVID curbs in Shanghai and relaxed testing mandates in several Chinese cities supported base metal prices. [IRONORE/]

"The burst of global enthusiasm for equities has put a spring in the step of the FTSE 100 at the start of the week," Hargreaves Lansdown analyst Susannah Streeter said.

Oil majors Shell and BP both rose over 1.5%, leading gains on the index. [O/R]

Meanwhile, mining stocks Anglo American, Rio Tinto and Glencore gained between 1.7% and 3% after Group of Seven leaders pledged to raise $600 billion of private and public funds in five years to finance needed infrastructure in developing countries.

"It is hoped this scheme, seen as a counter to China's Belt and Road Initiative, will set off a spurt of spending and demand for commodities around the world," Streeter added.

UK's FTSE 100 index has tumbled 4.6% in June, and was set to post its first monthly decline in four, as blue-chip stocks bear the brunt of growing recession fears due to aggressive monetary policy tightening to tame surging inflation.

Among individual stocks, CareTech surged 21.1% after the UK-based provider of care and residential services agreed to be acquired by a consortium led by Sheikh Hoidings in a 870.3 million pounds ($1.07 billion) deal.

BAE Systems rose 2.0% after the defence company received a $12 billion contract from the U.S Department of Defence.

IHG gained 1.1% after the Holiday Inn-owner said it was stopping all operations in Russia due to Western sanctions and increasing challenges of doing business there after the Ukraine invasion.

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