London shares eye weekly gains as miners spark rally

By Pranav Kashyap and Khushi Singh

(Reuters) -British equities rose on Friday and were set for weekly gains, led by metal miners, while data showed that the economy grew for a second straight month in February, on course to exit a shallow recession.

The exporter-heavy FTSE 100 was up 1% as of 0811 GMT, and the mid-cap FTSE 250 index rose nearly 0.9%. Both indexes are on track to notch weekly gains.

Industrial metal miners advanced 3%, tracking higher metal prices in Shanghai as funds pumped money into commodities, including metals to hedge against rising inflation. [MET/L]

Precious metal miners led sectoral gains with a 3.3% rise, with gold prices hitting a historic peak. [GOL/]

The index is also set to become the top performing sector for the week, adding 4.7%.

Britain’s GDP grew 0.1% in February, in line with a Reuters poll of economists. January’s reading was revised higher, pointing to an exit from recession in early 2024.

UK GDP data will allow the Bank of England (BoE) to feel comfortable about cutting rates in the second half of 2024 as it’s looking for an economy that’s strong enough to see growth holding up but not too strong to see inflation reaccelerate, said Hugh Gimber, global market strategist at J.P. Morgan Asset Management.

Currently, traders expect the BoE to ease rates in August.

Meanwhile, the U.S. earnings season will kick off later in the day with Citi, Wells Fargo, JPMorgan Chase and BlackRock due to report first-quarter results.

Among individual stocks, BP gained 2.3% after United Arab Emirates’ state-owned oil company Abu Dhabi National Oil Company (ADNOC) recently considered buying the energy giant, according to sources, but deliberations did not progress beyond preliminary discussions.

R&Q Insurance’s shares hit a record low, losing 45.4% after the Bermuda-based non-life global specialty insurance firm said it anticipates significant annual pre-tax loss due to higher costs on the sale of a business unit.

(Reporting by Pranav Kashyap, Khushi Singh in Bengaluru; Editing by Sohini Goswami and Sonia Cheema)