UK stocks close higher as miners, banks rebound
Market Performance and Key Drivers
May 13 (Reuters) - UK stocks ended higher on Wednesday, recovering from a sluggish start as gains in industrial miners and banks helped offset concerns over domestic political uncertainty.
The blue-chip FTSE 100 index closed 0.58% higher, while the mid-cap FTSE 250 rose 0.28%. Industrial miners rose 4.36% and banks advanced 1.44%, rebounding from a day earlier.
Top Performers in the Market
Intertek was one of the top gainers on the FTSE 100, closing 5.28% higher after the product testing company said on Wednesday it was ready to recommend a 9.4 billion pound ($12.7 billion) takeover proposal by Swedish private equity group EQT.
Investor Sentiment Amid Political Uncertainty
The gains helped reassure investors unsettled by the Middle East impasse, rising oil prices and fresh uncertainty over Prime Minister Keir Starmer's future.
Leadership Turmoil and Economic Implications
Health Minister Wes Streeting is preparing to resign and could quit as early as Thursday, the Times reported on Wednesday, adding that he is likely to mount a formal challenge for the party leadership.
That came despite Starmer's plea to voters and his party's lawmakers to stick with him and avoid a leadership contest he said would only bring chaos.
"The Prime Minister may be 'forced' to step down if enough ministers resign. His defenestration seems to be a matter of when rather than if," said Robert Wood, chief UK economist at Pantheon Macroeconomics.
Investors were also worried that a potential successor to Starmer might advocate for increased spending, despite Britain's already strained finances.
"The likely replacements would probably not be as fiscally disciplined. A discretionary loosening in fiscal policy is on the way regardless of who is PM," said Ruth Gregory, deputy chief UK economist at Capital Economics.
International Developments Impacting Markets
Meanwhile, U.S. President Donald Trump's state visit to China for talks with Chinese President Xi Jinping is in focus.
Trump told reporters he does not need Beijing's help to end the war with Iran, but the high-stakes meeting is expected to include discussions on trade, Taiwan and Iran.
Economic Data Releases
Separately, data released on Wednesday showed that U.S. producer prices increased more than expected in April, posting their biggest gain since early 2022.
(Reporting by Niket Nishant in Bengaluru; Editing by Tasim Zahid)
