UK stocks close higher, Mitie Group soars on buyout deal
Market Overview and Key Movers
July 21 (Reuters) - Britain's FTSE 100 closed higher on Tuesday, aided by gains in banking and energy stocks, while shares of Mitie Group soared after outsourcer OCS Group's £3.1 billion buyout deal.
The blue-chip FTSE 100 index rose 0.58%, while the midcap FTSE 250 added 0.90%.
Energy and Commodity Sectors
Oil Majors Benefit from Geopolitical Tensions
• Shares of British oil majors BP and Shell rose more than 1% as crude prices touched a five-week high after attacks between the U.S. and Iran and a threatened naval blockade of Saudi Arabia by Yemen's Houthis sparked concerns about supply disruption. [O/R]
Precious Metal Miners Lead Sectoral Gains
• Precious metal miners led sectoral gains, up 4.2%, tracking a rise in gold prices, as geopolitical tensions persisted.[GOL/]
Corporate Highlights
Mitie Group Acquisition
OCS Group's £3.1 Billion Buyout
• Mitie jumped 38.8% to the top of the midcap index after the British outsourcer agreed to be acquired by rival OCS Group International in a deal valued at about £3.1 billion ($4.17 billion).
Corporate Earnings and Forecasts
• Investors sifted through a fresh batch of corporate earnings for signs of how the Middle East conflict is affecting companies.
• Compass Group shares fell 1.6% even as the catering giant reported a third-quarter organic revenue growth of 7.1%.
• IQE shares surged 30.4% after the UK semiconductor wafer maker raised its full-year revenue growth forecast.
Economic and Policy Updates
UK Jobs Market and Bank of England Outlook
• Britain's jobs market appears to have stabilised at weak levels, with official data showing annual wage growth and unemployment steady in the three months to May and payrolled employment little changed in June.
• The increase was in line with forecasts in a Reuters poll of economists and did little to change expectations that the Bank of England will keep interest rates on hold.
Defence Sector Reaction to Political Changes
• London-listed defence stocks rose a day after Britain's new Prime Minister Andy Burnham appointed former defence minister John Healey as finance minister. Shares of Babcock International rose 4.1%, Qinetiq gained 3.1% and BAE Systems added 1.8%.
(Reporting by Tharuniyaa Lakshmi and Sruthi Shankar in Bengaluru; Editing by Sahal Muhammed and Gareth Jones )