Commodity Stocks Drive FTSE 100 to More Than One-Week High

By Boleslaw Lasocki

(Reuters) -UK’s FTSE 100 index hit a more than one-week high on Monday, as an easing of COVID-19 restrictions in China and a potential global infrastructure funding brought relief to commodity prices, lifting shares of major oil and mining companies.

The commodity-heavy FTSE 100 rose 0.8% to hit its highest level since June 16 by 0840 GMT. The domestically focused mid-cap FTSE 250 index advanced 1.2%.

Risk sentiment improved after a Wall Street rally late last week and a rebound in copper as well as iron ore prices on Monday, boosted by an easing COVID-19 restrictions in Shanghai and relaxed testing mandates in several Chinese cities. [MET/L] [IRONORE/]

“The burst of global enthusiasm for equities has put a spring in the step of the FTSE 100 at the start of the week,” Hargreaves Lansdown analyst Susannah Streeter said.

Mining stocks led gains on the FTSE 100 index, with Anglo American, Rio Tinto and Glencore rising more than 3%, after Group of Seven leaders pledged to raise $600 billion private and public funds in five years to finance needed infrastructure in developing countries.

“It is hoped this scheme, seen as a counter to China’s Belt and Road Initiative, will set off a spurt of spending and demand for commodities around the world,” Streeter added.

UK’s FTSE 100 index has tumbled more than 4% in June, and was set to post its first monthly decline in four, as blue-chip stocks bear the brunt of growing recession fears due to aggressive monetary policy tightening to tame surging inflation.

Among individual stocks, CareTech surged 20.8% after the UK-based provider of care and residential services agreed to be acquired by a consortium led by Sheikh Hoidings in a 870.3 million pounds ($1.07 billion) deal.

Carnival Corp jumped 5.6%, extending its Friday gains after the leisure travel company forecast a positive core profit for the current quarter despite surging costs.

BAE Systems rose 1.2% after the defence company received a $12 billion contract from the U.S Department of Defence.

(Reporting by Boleslaw Lasocki in Gdansk; Editing by Sherry Jacob-Phillips and Amy Caren Daniel)