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Miners, banks lift FTSE 100 to its best session in two months; Vectura Group jumps

Weaker pound, mining stocks push blue-chip FTSE 100 higher
Weaker pound, mining stocks push blue-chip FTSE 100 higher   -   Copyright  Thomson Reuters 2021
By Reuters

By Amal S

-London’s FTSE 100 marked its best session in over two months on Friday, boosted by gains in mining and bank stocks, but ended the week flat on signs that the pace of economic recovery could be slower than expected.

The blue-chip FTSE 100 ended 1.3% up, powered by base miners and banks up 4.1% and 1.8% respectively.

Miners including BHP Group, Rio Tinto, Glencore, Anglo American were among the top gainers.

Britain’s economy grew by a slower-than-expected 0.8% in May compared with April, official data showed. A Reuters poll of economists had pointed to a month-on-month gross domestic product growth of 1.5%.

“Overall, the message is one of cautious optimism. There will be some who will see May’s figures as disappointing, but recovery won’t go in a straight line, there will be peaks and troughs and yes maybe the odd U-turn. But the economy is growing and consumers are spending,” said Danni Hewson, financial analyst at AJ Bell.

The FTSE 100, which has gained nearly 10.2% so far this year on availability of cheap funds, ended the week flat as a jump in coronavirus infections raised concerns about the pace of economic recovery.

“Its very disappointing that the spread of the Delta variant of the COVID-19 is accelerating in some countries, but it’s still not likely to lead to an extended lockdown that we saw earlier in the pandemic,” said Edward Moya, senior analyst at Oanda.

“So there’s this belief that even though its a massive road bump, but these economies will be able to get through it.”

The domestically focussed mid-cap index was up 1.1%.

Travel stocks gained 1% after three straight sessions of declines, as Britain plans to scrap quarantine for fully-vaccinated arrivals in the coming weeks.

Among stocks, Vectura Group jumped 14% to the top of the mid-cap index after cigarette maker Philip Morris said it would buy the pharmaceutical company in a deal valuing it at 1.05 billion pounds ($1.44 billion).