LONDON: Britain’s top share index climbed to an 11-month high on Monday, with a rally in mining companies on the back of stronger metals prices and expectations of further monetary easing by the Bank of England helping the market.
Financials and property-related stocks, hit hard after last month’s landmark referendum in Britain to leave the European Union, were also back in demand.
The FTSE 100 index, many of whose constituents have big international operations, was up 0.5 percent at 6,623.05 points by 0824 GMT after rising to 6,639.49, a level not seen since last August.
The benchmark index is up nearly 5 percent since its close a day before the result of the EU referendum in Britain in late June. However, in U.S. dollar terms, it is down about 9 percent because of a slump in the value of sterling.
The domestically-focused mid-cap FTSE 250 was up 1.1 percent on Monday. But it is down 5.5 percent in sterling terms since a close on June 23 as an expected negative impact on the UK economy following the Brexit vote is seen hurting its members more than the FTSE 100 companies.
Basic resources stocks supported the broader market, with the UK mining index rising nearly 3 percent, the top sectoral gainer, to an 11-month high, helped by a 2.1 to 5.1 percent rise Anglo American, Glencore and Antofagasta.
“Investor appetite for risk and hunger for outperformance is being nourished by miners and financials, accompanied by continued rebound by those Brexit-battered housebuilders,” Mike van Dulken, head of research at Accendo Markets, said.
“The Bank of England is also set to turn up the stimulus dial this week after several years of inaction.”
Sentiment has improved on expectations of further stimulus measures by the Bank of England. Governor Mark Carney has already signalled that the BoE will cut rates below their already record low levels over the summer and possibly resume its 375 billion-pound bond-buying programme.
Most economists in a Reuters poll last week expected the BoE to wait until August, when it will have a better idea of the state of the economy, before starting to pump more stimulus into the economy. However, many investors are betting on action sooner than that, putting pressure on the Bank to act when it makes its monthly policy announcement on Thursday.
Among other sectors, the UK banking index rose 0.8 percent, while the FTSE 350 Real Estate index was up 1.8 percent.
Shares in Royal Bank of Scotland, Barclays. Barratt Development, Persimmon and Taylor Wimpey advanced between 1.3 and 3.7 percent.
Copyright Reuters, 2016
Courtesy : BRecorder