London close: FTSE rises on miners as Brexit, Fed, BoE and Scottish referendum figure

Shares in London ended their tentative Monday session on a modestly positive note with rising metals prices helping the heavyweight mining sector and FTSE 100 higher.

Household Goods & Home Construction

11,324.30

15:45 15/11/24

-0.77%

-87.44

Oil Equipment, Services & Distribution

4,928.34

16:30 25/09/24

0.00%

0.00

Wood Group (John)

49.84p

15:39 15/11/24

-1.70%

-0.86p

Factors contributing to the Monday caution -- likely present for the rest of the week -- were UK likely triggering Article 50, and rate calls by the US Federal Reserve and Bank of England.

The prices of precious metals gold and silver were firming less than 1%, while industrial favourite copper rose more than 1%. Three-month industrial metals also advanced. In other news, strategists at JP Morgan upgraded their recommendation on Miners from 'Neutral' to 'Overweight'.

A confluence of all these factors helped the FTSE 100 to close up 0.33% or 24.00 points to 7,367.08, and the FTSE 250 to rise 0.36% or 67.75 points to 19,029.17. Equities indices in the US were mixed, but those in Europe also finished in positive territory.

The anticipation of a busy week ahead including the Bank of England's policy meeting, a potential populist revolt in the Dutch national election and a likely US interest rate hike meant there was a slow burn in markets on Monday.

Investors were also expectant ahead of a possible decision by Downing Street to trigger Article 50 of the Lisbon Treaty, possibly as soon as 15 March.

However, after the close of trading a spokesperson for the Prime Minister said an announcement would not come this week.

London Capital Group senior market analyst Jasper Lawler said markets anticipating a busy had contributed to Monday's "slow burn".

He cited the possible triggering of Article 50, a potential populist revolt in the Dutch national election and a likely US interest rate.

IG chief market analyst Chris Beauchamp noted that the FTSE's tentative start had given over to a decent gain for the day, "even if Wall Street’s performance this afternoon has been distinctly lacklustre.

Back in London, there was a big rise on the FTSE 350 index for miners, with key constituents Fresnillo and Antofagasta each soaring more than 5%.

Also gaining were Anglo American, Rio Tinto and BHP Billiton, all by more than 2.5%.

"A strong performance from base metals has meant that the lion’s share of gains in London have come from the mining sector," said Beauchamp.

"After a tough month for the likes of copper, it looks a bottom could be in place, which should support mining names such as BHP Billiton and Rio Tinto," he said.

The FTSE 350 index for oil equipment services and distribution was firmly ahead.

It was boosted by a surge in Amec Foster Wheeler's shares on news of its agreed all-share offer from Wood Group that values the engineer at around £2.2bn.

In other deal-related news, housebuilder Bovis Homes surged as it said it was in merger talks with Galliford Try, after it rejected a £1bn offer from Redrow.

HSBC was higher on confirmation it had hired ex-Prudential boss Mark Tucker to replace Douglas Flint as chairman of the world's fourth largest bank.

SSE will increase its standard domestic electricity prices from 28 April, bumping up a customer's typical dual fuel bill by £73 or an average 14.9% to reflect the increasing cost of supply.

Meantime, on Thursday, Bank of England's latest rate announcement is due, although no changes were expected.

The market is, however, anticipating a rise in the US Fed's benchmark rate on Wednesday, this following last week's non-farm payrolls data and hawkish jawboning by central bank officials.

Against this fabric, investors are also closely watching the long-running Brexit saga, with UK's Upper and Lower houses again debating the Brexit Bill on Monday.

The general expectation was the PM Theresa May was likely to have the legislative framework in place to activate Article 50 and begin up to two years of negotiations for UK to quit the EU.

Complicating matters, earlier on Monday Scotland's first minister said she would push for another referendum to give Scots a choice between Hard Brexit and independence as soon as next week.

Her remarks pushed 10-year Gilts yields up to 1.25%, which spilled over into FX markets, sending the pound higher by 0.48% to 1.2230 versus the US dollar.

"The Scottish National Party has thrown another spanner in the Brexit works with calls for another Scottish referendum," said Lawler, referring to the well-telegraphed move.

Market Movers

FTSE 100 (UKX) 7,367.08 0.33%
FTSE 250 (MCX) 19,029.17 0.36%
techMARK (TASX) 3,466.56 0.09%

FTSE 100 - Risers

Fresnillo (FRES) 1,436.00p 5.59%
Antofagasta (ANTO) 785.00p 4.88%
Capita (CPI) 568.00p 4.32%
Anglo American (AAL) 1,187.50p 4.03%
Rio Tinto (RIO) 3,304.50p 3.96%
Smiths Group (SMIN) 1,574.00p 2.74%
BHP Billiton (BLT) 1,275.50p 2.49%
Randgold Resources Ltd. (RRS) 6,970.00p 1.75%
Mediclinic International (MDC) 756.50p 1.54%
Johnson Matthey (JMAT) 2,952.00p 1.41%