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Miners, banks lift FTSE 100 from 3-week lows

London stocks inch higher, pub operator Mitchells jumps after results
London stocks inch higher, pub operator Mitchells jumps after results Copyright Thomson Reuters 2021
Copyright Thomson Reuters 2021
By Reuters
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By Bansari Mayur Kamdar

-Britain's FTSE 100 snapped a four-day losing streak on Monday driven by gains in heavyweight mining and financial stocks, while deal-making activity in the European telecoms sector boosted shares in Vodafone and BT Group.

The blue-chip index closed 0.4% higher, bouncing back from a three-week low hit last week.

London-listed Chilean copper miner Antofagasta jumped 5% to the top of the FTSE 100 after hard-right former congressman Jose Antonio Kast topped the first-round of Chile's presidential election, clearing up some political uncertainty.

Other base-metal miners also rose 1.7%, while the rate-sensitive bank share index gained 1.4% to provide the biggest boost to the index.

Traders' focus remained firmly on whether or not the Bank of England (BoE) will raise interest rates at its December meeting against the backdrop of surging inflation.

Meanwhile, sentiment was also bolstered after U.S. President Joe Biden picked Jerome Powell to continue as Federal Reserve chair, in a move welcomed as a signal of stability by global investors.

"Powell's renomination removes a potential negative from the markets and provides the certainty that investors crave. Powell is sound, tested, respected and familiar to markets," said George Ball, chairman of Sanders Morris Harris, an investment firm based in Texas, United States.

Bogged down by inflationary pressures and supply chain problems, the FTSE 100 has gained just 13.5% this year, underperforming its European and U.S peers.

Meanwhile, the domestically focussed mid-cap FTSE 250 index ended 0.3% lower, dragged down by a 27.2% drop in shares of Hochschild Mining over uncertainty related to operational extensions of its flagship Inmaculada mine in Peru.

BT Group and Vodafone rose 2.5% and 3.2%, respectively, in a broad sector rally after U.S. fund KKR proposed to take Italy's Telecom Italia private.

Marks and Spencer added 2%, after a media report that U.S. investment firm Apollo Global Management is mulling a buyout of the retailer.

Diploma Plc climbed 8% after the technical products and services provider forecast 10% growth in reported revenue for its 2021/22 financial year.

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