London close: FTSE 100 punches away to positive close as sterling slides
UK blue chips punched away through Monday to achieve a firmly positive close, helped by sterling's retreat against a stabilising US dollar.
Wall St got off to a mixed start, but European indices were overall rising. Gold, silver and copper prices were much lower, although crude gained as US rig-count data pleased.
Gold's decline had much to do with the stabilising US dollar, profit taking and increasingly hawkish overtones from central banks outside the US diminishing the greenback's attraction.
The market closed with the FTSE 100 up 0.88% to 7,377.09 and the FTSE 250 down 0.10% to 19,320.43.
"Equity markets in Europe have started the week on a positive note," said David Madden, market analyst at CMC Markets UK.
"The pullback in the pound and the euro made stocks more appealing as last week the UK and Eurozone equity markets paid the price for having strong domestic currencies."
Against this backdrop, the UK's manufacturing purchasing-managers' index (PMI) in June came in below expectations, while that for the Euro zone beat forecasts.
"With the UK manufacturing PMI hitting a three-month low in June, the slowdown in new business and output is a worry given that this takes place in such an accommodative exchange rate environment," said Joshua Mahony, market analyst at IG.
Connor Campbell at Spreadex continued: "Unlike in the UK and US, were the pound and dollar dealt with the PMI-reaction, it was the Eurozone indices that most benefited from the region's six-year manufacturing high, clawing back a big chunk of last week’s euro-inspired losses."
Mahony, meanwhile, noted that this week was laden with big data releases, and with the all-important services PMI due Wednesday.
Looking more closely at the blue chips, miners soared as China's Caixin manufacturing PMI for June beat views.
Glencore, Antofagasta, Anglo American, BHP Billiton and Rio Tinto all racked up healthy gains. Heading the other way were Randgold Resources and Fresnillo as gold prices plunged.
Banks such as HSBC, Standard Chartered, Royal Bank of Scotland, Lloyds and Barclays rose on hawkish comments from Bank of England members Mark Carney and Andy Haldane last week.
These high-street lenders have better earnings potential in a higher interest rate environment, and the talk of monetary tightening made the stocks attractive.
Meanwhile, Provident Financial tumbled on a research note by Numis, which downgraded its stance on the stock to 'sell' from 'reduce' and cut the price target to 1,929p from 2,335p.
In other news, Severn Trent retreated after selling its North American business for $62m as it looks to focus on its core UK activities.
Energy companies Centrica and SSE were higher despite Ofgem proposing a price cap on energy bills to protect vulnerable consumers.
AstraZeneca nudged lower after confirming the completion of two major transactions, bringing in almost half a billion dollars for the drugmaker in the current financial year.
Sainsbury's was on the back foot ahead of its first-quarter trading statement on Tuesday. Other supermarkets softening included Morrisons and Tesco.
Commercial property was also softening, as were several house builders.
Market Movers
FTSE 100 (UKX) 7,377.09 0.88%
FTSE 250 (MCX) 19,320.43 -0.10%
techMARK (TASX) 3,497.93 -0.28%
FTSE 100 - Risers
Glencore (GLEN) 301.60p 5.01%
Rio Tinto (RIO) 3,374.50p 4.09%
Anglo American (AAL) 1,065.00p 4.00%
Royal Bank of Scotland Group (RBS) 255.50p 3.36%
BHP Billiton (BLT) 1,214.50p 3.27%
Antofagasta (ANTO) 824.00p 3.06%
HSBC Holdings (HSBA) 729.80p 2.54%
Barclays (BARC) 207.05p 2.12%
BP (BP.) 451.60p 1.92%
Legal & General Group (LGEN) 263.10p 1.86%
FTSE 100 - Fallers
Provident Financial (PFG) 2,368.00p -2.67%
Micro Focus International (MCRO) 2,229.00p -1.85%
Hargreaves Lansdown (HL.) 1,281.00p -1.61%
Morrison (Wm) Supermarkets (MRW) 237.60p -1.49%
Fresnillo (FRES) 1,466.00p -1.35%
Randgold Resources Ltd. (RRS) 6,715.00p -1.32%
DCC (DCC) 6,905.00p -1.22%
Sainsbury (J) (SBRY) 248.90p -1.11%
Sage Group (SGE) 680.50p -1.09%
Whitbread (WTB) 3,925.00p -1.06%
FTSE 250 - Risers
Evraz (EVR) 220.00p 6.33%
Vedanta Resources (VED) 681.50p 6.15%
Nostrum Oil & Gas (NOG) 499.00p 5.12%
TBC Bank Group (TBCG) 1,665.00p 5.11%
Vesuvius (VSVS) 554.00p 4.43%
Petrofac Ltd. (PFC) 460.50p 4.19%
Kaz Minerals (KAZ) 539.00p 4.15%
BGEO Group (BGEO) 3,633.00p 3.98%
Electrocomponents (ECM) 599.00p 3.81%
Tullow Oil (TLW) 156.40p 3.78%
FTSE 250 - Fallers
Sirius Minerals (SXX) 28.31p -6.30%
Softcat (SCT) 374.30p -5.07%
Inmarsat (ISAT) 733.00p -4.74%
NMC Health (NMC) 2,103.00p -3.80%
Greene King (GNK) 649.50p -3.56%
Acacia Mining (ACA) 287.30p -3.56%
Domino's Pizza Group (DOM) 283.60p -3.50%
Rank Group (RNK) 229.00p -3.46%
Hochschild Mining (HOC) 265.00p -3.36%
Restaurant Group (RTN) 317.20p -3.15%