- Rio Tinto drops on lower iron-ore shipment forecasts
- Mediclinic top mid-cap gainer on strong H1 revenue growth
- FTSE 100 at near 20-month highs
- FTSE 100 up 0.4%, FTSE 250 adds 0.5%
Oct 15 (Reuters) – London’s FTSE 100 rose to a near 20-month high on Friday, recovering all losses since the pandemic began, helped by gains in heavyweight oil and banking shares as investors were optimistic about a steady economic recovery.
The FTSE 100 index (.FTSE) advanced 0.4%. The commodity-heavy index was up 1.8% for the week and recorded its best week since May this year, with precious (.FTNMX551030) and industrial miners (.FTNMX551020) the biggest gainers.
The “UK has been quite positive over the last few weeks so supply chain shortages haven’t really been holding back the markets,” said Thomas Mathews, markets economist at Capital Economics.
The FTSE 100 has risen nearly 12% this year to its highest since February 2020, supported by upbeat earnings, accommodative central bank policies and gains in oil and metal prices, which boosted commodity-related stocks.
However, inflation worries and supply-chain disruptions led the blue-chip index to underperform the wider European stock index (.STOXX), which recovered to pre-pandemic levels at the beginning of this year.
“There is risk that if the labour or product shortages stick around for a bit longer, it could become a more of a permanent drag on earnings and you might see stocks struggle as well,” added Mathews.
Banks (.FTNMX301010) gained 1.8% on the day and gave the second biggest boost to the index, with HSBC Holdings plc (HSBA.L) adding 1.9% after Barclays and Bank of America raised their price targets on the stock.
The largest percentage gainer on the FTSE 100 was IAG (ICAG.L), up 3.3% after the British Airways owner said its finance chief, Steve Gunning, would step down after the airline’s 2021 results report and named Premier Inn hotel operator Whitbread’s (WTB.L) Nicholas Cadbury as his successor.
Mediclinic (MDCM.L) was the top performer on the mid-cap index after it reported strong first-half revenue growth, which was ahead of pre-pandemic levels.
Reporting by Bansari Mayur Kamdar, Shashank Nayar and Amal S; Editing by Amy Caren Daniel and Jonathan Oatis
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