LONDON: British shares rebounded on Monday, led by homebuilders and miners, as hopes of a vaccine-led economic recovery and more US stimulus overshadowed fears of higher inflation and tightening monetary policy.
The blue-chip FTSE 100 index climbed 1.9% by 0920 GMT, with homebuilders Persimmon Plc and Taylor Wimpey plc being top gainers on the index after a media report that finance minister Rishi Sunak was expected to announce a mortgage guarantee scheme as part of the budget.
Mining stocks including Rio Tinto, Anglo American and BHP and oil heavyweights BP and Royal Dutch Shell also boosted the index.
“On the whole as the market, the bond market seems to be reacting to a bit of an overwhelmed selling done last week,” said Neil Wilson, chief market analyst at Markets.com.
“Investors will look closely today how the US 10-year yield reacts to the stimulus when the markets open.”
The FTSE 100 fell 2.1% last week, snapping three consecutive weeks of gains as expectations of a spike in inflation and rising bond yields sparked a flight to the dollar and other perceived safe-haven assets.
Sunak will announce an extra 1.65 billion pounds ($2.30 billion) to fund the country’s fast vaccination rollout as part of his annual budget statement on Wednesday, the finance ministry said.
The domestically focused mid-cap FTSE 250 index rose 1.9%, while British manufacturers reported the slowest output growth since May last month due to supply-chain disruptions and rising costs linked to Brexit and COVID-19.
AstraZeneca Plc rose 1.6% after a report said the company had sold its 7.7% stake in Moderna Inc for more than $1 billion. Ladbrokes owner Entain rose 2.4 as it raised its offer for rival sports betting firm Enlabs AB, valuing the Sweden-based company at about 3.7 billion crowns ($440.16 million). Reach, publisher of Britain’s Daily Mirror and Daily Express, fell 1%, after reporting a 12.8% drop in annual profit.
Comments
Comments are closed.