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FTSE 100 rises on mining, oil boost; Tesco drops in ex-dividend trading

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·2-min read
FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain
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By Shashank Nayar and Bansari Mayur Kamdar

(Reuters) - London's FTSE 100 rose to a two-month high on Thursday, boosted by heavyweight oil and mining stocks, while retailer Tesco was the top drag as its shares traded ex-dividend.

The blue-chip FTSE 100 index climbed 0.9% and recorded its best session in a week, with miners Antofagasta, Rio Tinto and Glencore among the top performers.

Oil majors BP and Royal Dutch Shell gained 0.8% and 1.4%, respectively tracking over 1% jump in crude prices. [O/R]

Industrial miners and oil stocks are the top performing sub-indexes so far this year, adding 28% and 37%, respectively.

The mining index has surged over 200% since their March 2020 lows on recovering metal demand as economies re-opened from pandemic-led lockdowns.

"On a broader basis, a slowdown in the global economic recovery could easily trigger a pullback in commodity prices in the near-term, but for today it seems that investors are very much risk-on," said Russ Mould, investment director at AJ Bell.

The FTSE 100 has gained 11.6% so far this year but the pace has slowed on bets that rising inflation pressures will lead central banks to pull back their accommodative monetary policies.

Bank of England policymaker Silvana Tenreyro said the central bank should not raise interest rates to tackle a surge in inflation caused by higher prices for energy and semi-conductors if it thinks these effects will be short-lived.

The domestically focussed mid-cap index advanced 1.0%, with recruiter Hays Plc among the top gainers. The stock rose 3.0% after the company reported a jump in its quarterly net fees.

Dunelm Group Plc rose -0.2% after reporting a strong rise in sales despite an uncertain outlook for the coming year.

Ashmore Group fell 0.1% after its assets under management fell by $3.1 billion during the third quarter of 2021 on emerging market woes and institutional outflows.

Graphic: Miners UK Markets

(Reporting by Bansari Mayur Kamdar and Amal S; Editing by Subhranshu Sahu and Sriraj Kalluvila)

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