Resources lift FTSE 100 to mid-2019 highs
UK’s exporter-heavy FTSE 100 hit a more than three-year high on Monday, led by commodity-linked stocks, as China’s reopening of its borders reinforced hopes for a rebound in the world’s second-largest economy.
The blue-chip FTSE 100 gained 0.2%, hitting its highest since July 30, 2019, while the more domestically focused FTSE 250 mid-cap index rose 0.4%.
Industrial metal miners gained 1.4%, while oil majors Shell and BP also advanced as oil prices climbed on China demand prospects after Beijing opened on Sunday borders that have been all but shut since the start of the COVID-19 pandemic.
“The continued progress of pulling back from restrictive COVID policy in China has continued to boost sentiment,” said Giles Coghlan, chief market analyst at HYCM, adding that expectations for tempered U.S. tightening also aided sentiment.
Despite surging inflation and risks of a global recession, the FTSE 100 outperformed major global markets last year due to high exposure to commodity prices.
The economic outlook still looks bleak, with an industry survey of manufacturers showing Britain has become less competitive and less attractive to foreign investors as a result of soaring energy costs and recent political turmoil.
Shares of Keller Group Plc fell 6.9% after the engineering contractor warned its annual operating profit would come in slightly below the bottom end of market expectations, hit by financial reporting fraud in its Australia-based unit Austral.
Game developer Frontier Developments crashed 39.4% after downgrading its 2023 guidance. Devolver Digital, another gaming stock, slumped 9.4% after the company reported weaker-than-forecast December sales volumes and a lower-than-expected performance for the second half of 2022 financial year.
AstraZeneca slipped 0.9% after the pharmaceutical company said it would buy U.S.-based clinical-stage biopharmaceutical firm CinCor Pharma Inc in a deal valued at about $1.8 billion to strengthen its pipeline of heart and kidney drugs. (Reporting by Shashwat Chauhan in Bengaluru; Editing by Subhranshu Sahu)
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