London close: Real estate stocks jump as political uncertainty recedes

London stocks clocked in with sharp gains at the start of the week after news broke that Theresa May would become Britain's next prime minister and on expectations for further monetary policy easing by the Bank of England and its Japanese counterpart.

Theresa May now looks almost certain become Britain's next prime minister as early this week after her main rival for the job quit the Conservative leadership race and David Cameron said he would resign on Wednesday, in yet another tumultuous day in Westminster.

That served to light a fire under real estate stocks, which saw the Footsie end the session with a gain of 92.22 points or 1.44% to 6,682.86, but the advance was dwarfed by the 528.64 point or 3.27% rise in the second-tier, and more domestically oriented, FTSE 250.

Overnight, Asian stocks finished the session with strong gains, as some reports emerged that ex-US central bank chief Ben Bernanke had met with Bank of Japan governor Haruhiko Kuroda amid growing speculation that the BoJ might be set to step-up its policy easing, perhaps even quite substantially.

After Wall Street finished last week on the front foot, with the S&P closing near record highs, following a strong non-farm payrolls report for the month of June, some of the doubts lingering over the outlook for the USA were alleviated.

The possibility of further stimulus stoked buying interest in the mining giants, including Anglo American, Glencore, Antofagasta and BHP Billiton.

As if 17:07 BST the September COMEX-traded copper futures contract was tacking on 1.42% to $2.1490/lb..

Monday was a quiet day for macroeconomic data, with no major releases published.

The UK was also just days away from the next Bank of England policy meeting, with investors almost certain a rate cut would be announced on Thursday, as the Monetary Policy Committee looked to reduce the shock of the EU referendum decision on the UK economy.

Nevertheless, Governor Mark Carney had made his dislike of negative interest rates clear and had also indicated that the July and August MPC meetings should be considered together as a package that would likely deliver stimulus.

Some observers felt the only option is a shock cut from the current 0.5% base rate all the way down to zero, followed by quantitative easing in August, though odds are pointing to a 25 basis points cut and a revival of asset purchases as the likely option.

"A plunge in consumer confidence and evidence of markedly reduced business sentiment since the Brexit vote has enhanced the case for interest rates to be cut from 0.50% to 0.25% as soon as Thursday. To us, there seems little reason to wait on an interest rate cut front," said economist Howard Archer at IHS Global Insight, suspecting a revival of quantitative easing and end up extending its Funding for Lending Scheme in August.

Engine-maker Rolls scoops-up Spain´s ITP

In company news, Rolls-Royce has agreed to pay €720m to complete the full takeover of Spanish aero engine component manufacturer Industria de Turbo Propulsores (ITP). The FTSE 100 company, which currently owns a large minority stake in the profitable Bilbao-based business, will purchase the outstanding 53.1% shareholding in ITP from SENER Grupo de Ingeniería in eight installments over a two-year period.

RPC Group was one of the early leaders of the FTSE 250 as it unveiled a positive update on its first quarter trading - a quarter in which it continued integrating the acquisition of GCS and made an offer for BPI. The plastic products design and engineering companysaid revenues in the three months to 30 June were significantly higher than the same period last year, due to underlying growth and the contribution of acquisitions. Adjusted operating profit at constant currencies was also significantly ahead of both 2015, and management expectations.

CLS Holdings said it has exchanged contracts to buy two properties, one in Düsseldorf and one in Hamburg, for a total of €49.5m. The Düsseldorf property is to be bought for €43.6m including costs, and generates net rental income of €3.1m, reflecting a net initial yield of 7.1%. The property benefits from a high occupancy rate and presents significant scope for future rental uplifts and other asset management opportunities, CLS said.

Market Movers

FTSE 100 (UKX) 6,682.86 1.40%
FTSE 250 (MCX) 16,706.39 3.27%
techMARK (TASX) 3,314.63 1.49%

FTSE 100 - Risers

Anglo American (AAL) 807.30p 8.58%
Travis Perkins (TPK) 1,464.00p 7.81%
Barratt Developments (BDEV) 402.00p 7.72%
Persimmon (PSN) 1,521.00p 7.11%
Taylor Wimpey (TW.) 140.70p 7.07%
Berkeley Group Holdings (The) (BKG) 2,664.00p 6.95%
Glencore (GLEN) 177.80p 6.28%
Royal Bank of Scotland Group (RBS) 179.10p 6.22%
Fresnillo (FRES) 1,981.00p 6.10%
Antofagasta (ANTO) 479.50p 4.99%

FTSE 100 - Fallers

Rolls-Royce Holdings (RR.) 724.00p -1.50%
Shire Plc (SHP) 4,823.00p -0.48%
Smith & Nephew (SN.) 1,304.00p -0.46%
AstraZeneca (AZN) 4,556.00p -0.39%
Severn Trent (SVT) 2,454.00p -0.24%
Royal Dutch Shell 'A' (RDSA) 2,105.50p -0.05%
SABMiller (SAB) 4,399.00p -0.02%
Hikma Pharmaceuticals (HIK) 2,600.00p 0.00%
Unilever (ULVR) 3,656.00p 0.12%
BT Group (BT.A) 397.55p 0.15%

FTSE 250 - Risers

CLS Holdings (CLI) 1,376.00p 20.64%
Hochschild Mining (HOC) 241.60p 11.59%
Euromoney Institutional Investor (ERM) 1,060.00p 11.05%
Countryside Properties (CSP) 234.40p 10.62%
Marshalls (MSLH) 243.50p 10.34%
IP Group (IPO) 160.70p 10.21%
Virgin Money Holdings (UK) (VM.) 236.00p 9.82%
Kaz Minerals (KAZ) 138.60p 9.65%
Pendragon (PDG) 32.57p 8.55%
Crest Nicholson Holdings (CRST) 414.20p 8.46%

FTSE 250 - Fallers

CMC Markets (CMCX) 286.90p -1.34%
Cairn Energy (CNE) 208.80p -0.38%
UBM (UBM) 632.50p -0.08%
Inchcape (INCH) 688.00p 0.07%
International Public Partnerships Ltd. (INPP) 151.00p 0.13%
Darty (DRTY) 169.80p 0.18%
Tullow Oil (TLW) 220.00p 0.27%
HICL Infrastructure Company Ltd (HICL) 170.60p 0.35%
esure Group (ESUR) 264.50p 0.38%
Ultra Electronics Holdings (ULE) 1,759.00p 0.40%