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Banks, miners drive FTSE 100 to two-week highs

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Banks, miners drive FTSE 100 to two-week highs By Reuters

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Stock Markets 7 minutes ago (Sep 12, 2022 17:26)

© Reuters. FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville/File Photo

By Johann M Cherian and Bansari Mayur Kamdar

(Reuters) -UK stocks rallied into the close on Monday, with a surge in banking and mining stocks pushing the blue-chip FTSE 100 to over two-week highs even as data showed Britain’s economy expanded less than expected in July.

The FTSE 100 and the domestically focussed midcap index gained 1.7% each, aided by an upbeat global mood on news that Ukrainian forces advanced into territory seized from Russian troops, their worst defeat since the war’s early weeks.

European markets, most affected by the war spanning several months, surged. The region’s stocks gauge closed up 1.8%.

“Kyiv’s sudden momentum has many hoping that this moment is a turning point with the war against Russia,” said Edward Moya, senior market analyst at Oanda.

Ukraine-focused miner Ferrexpo Plc (LON:FXPO) jumped 11.3% to top UK’s midcap index.

Battered retail stocks were the best performers on the day with a 4.4% rise. Shares of Marks and Spencer (LON:MKS) and Asos climbed over 7%, while Tesco (LON:TSCO) jumped 5.5%.

Investors will focus on UK jobs and inflation data later this week for clues on the health of the domestic economy and direction of interest rates.

Data on Monday showed Britain’s economy grew less than expected in July, raising the risk that it is already in a recession, with the sharp climb in energy tariffs hurting demand for electricity and a leap in the cost of materials hitting the construction sector.

“The slow start to Q3 combined with a now confirmed Bank Holiday on 19 September should put the economy on course for a technical recession – albeit a marginal one – in Q3,” Deutsche Bank (ETR:DBKGn)’s Sanjay Raja wrote in a note.

However, investors shrugged off the data amid global risk-on moves on hopes of cooling U.S. inflation.

Mining stocks gained 2.1%, tracking stronger metal prices on supply risks in top consumer China and a weaker dollar. [MET/L]

A 1.2% jump in energy stocks on higher crude prices also buoyed the UK markets. [O/R]

HSBC (LON:HSBA) rose 2.1% after its Chief Financial Officer Ewen Stevenson told an investor conference that the bank will most likely resume share buybacks in the second half of next year.

Banks, miners drive FTSE 100 to two-week highs

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