Pedestrians leave and enter the London Stock Exchange in London, Britain August 15, 2017. REUTERS/Neil Hall/File Photo
Sept 27 (Reuters) – London’s FTSE 100 rose on Monday, helped by gains in heavyweight energy and banking stocks, while Rolls-Royce topped the blue-chip index after winning a contract from the U.S. Air Force.
The FTSE 100 (.FTSE) advanced 0.3% with the energy (.FTNMX601010) and banking (.FTNMX301010) sectors leading the gains.
BP (BP.L) rose 2% after saying that nearly a third of its British petrol stations had run out of the two main grades of fuel as panic buying forced the government to suspend competition laws and allow firms to work together to ease shortages.
Banks HSBC Holdings (HSBA.L), Barclays (BARC.L), Virgin Money UK (VMUK.L) and Standard Chartered (STAN.L) gained between 0.5% and 3.7%, tracking higher benchmark bond yields . Yields are trading at their highest level since May 2019, suggesting rising inflation pressures.
“The fact that the economic picture is becoming an awful lot more difficult doesn’t really bear any relation to what stock markets are doing,” said Michael Hewson, chief market analyst at CMC Markets UK.
“The stock market works on the basis of liquidity and at the moment (there is) plenty of it.”
The FTSE 100 has risen about 9.6% so far this year on support from easy central bank policies and re-opening optimism. But the pace of rise has been slowed recently by inflation risks sparked by higher energy costs and supply chain disruptions.
The domestically focussed mid-cap index (.FTMC) rose 0.4%, with travel and leisure stocks (.FTNMX405010) among top gainers.
Rolls-Royce (RR.L) gained 6.3% after winning a contest to provide engines for the U.S. Air Force B-52 Stratofortress bombers, while a price target hike by Morgan Stanley also helped. read more
Hikma Pharmaceuticals (HIK.L) inched 0.6% higher after saying it would buy U.S.-based sterile injectables company Custopharm in a $375 million deal.
Britain’s United Utilities (UU.L) slipped 0.4% despite forecasting higher revenue and profit for the first half.
Reporting by Bansari Mayur Kamdar; Editing by Subhranshu Sahu
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