Commodity boost lifts FTSE 100; Melrose jumps on unit sale

·2-min read
FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain

By Anisha Sircar

(Reuters) -London's FTSE 100 rode a rally in commodity stocks to close higher on Monday, while jet and auto parts supplier Melrose Industries jumped on a deal to sell a unit for $650 million.

The blue-chip index gained 1.0%, while the domestically oriented FTSE 250 advanced 1.2% as trading resumed after a long holiday weekend to mark Queen Elizabeth's Platinum Jubilee.

Miners Rio Tinto and Glencore rose 1.6% and 4%, lifting the broader mining sector, as copper prices rallied to five-week highs on hopes of stronger demand from China after the top metals consumer lifted COVID-19 curbs.

Oil majors BP and Shell added 2.1% and 1.4%, respectively, tracking a rally in Brent crude to above $120 a barrel after Saudi Arabia hiked prices for its crude sales in July. [O/R]

"Markets are unfazed by the political shenanigans unfolding at Westminster - there is a vast ocean of blue water between a vote of no confidence being called, and a new prime minister picking out wallpaper for number 10," said Danni Hewson, a financial analyst at AJ Bell.

Prime Minister Boris Johnson was due to face a confidence vote called by members of his Conservative Party. Johnson was expected to survive the vote, called after a growing number of lawmakers in the governing Conservative Party questioned the British leader's flagging authority over the "partygate" scandal.

In the year so far, the FTSE 100 has risen 3.4% thanks to surging oil and metal prices, while the midcap FTSE 250 has declined 13% on concerns that rapid inflation could spark an economic slowdown.

This week, investor focus is on a European Central Bank policy meeting on Thursday and U.S. consumer price data due on Friday.

On Monday, nearly all sectors on the FTSE 100 traded in positive territory, with the biggest boosts coming from homebuilders and miners.

Melrose Industries Plc rose 3.3% after agreeing to sell its Ergotron unit, which makes ergonomic desks and office accessories, to funds managed by U.S.-based Sterling Group.

(Reporting by Anisha Sircar and Amal S in Bengaluru; Editing by Rashmi Aich, Subhranshu Sahu and Aditya Soni)

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