A 1.7% jump in energy stocks on higher crude prices also buoyed the index
UK’s blue-chip FTSE 100 rose on Monday, lifted by commodities-linked stocks and banking shares, even as data showed the economy expanded less than expected in July.
The benchmark FTSE 100 index advanced 1.1% at 0808 GMT.
Mining stocks gained 2.6%, tracking firm metal prices on supply risks in top consumer China and a weaker dollar that made the greenback-priced metals cheaper for holders of other currencies.
A 1.7% jump in energy stocks on higher crude prices also buoyed the index.
Given the decline of the pound this year, it has been helpful for commodity prices when they are translated to the sterling from the dollar, said Russ Mould, investment director at AJ Bell. It’s a bit like going into a store and finding all the candy bars at the same price, but 15% bigger.
The sterling advanced 0.8% against a weaker dollar on Monday but still lagged 13.7% this year. The currency will be in focus this week amid a period of national mourning for Queen Elizabeth II.
Rate-sensitive banks added 1.8%, tracking their European peers after the European Central Bank raised its key rates by an unprecedented 75 basis points (bps) and promised further increases.
Meanwhile, data showed Britain’s economy grew less than expected in July, with a fall in power production possibly reflecting the sharp climb in energy tariffs and the construction sector also hit by a leap in inflation.
The disappointingly small rebound in real GDP in July suggests that the economy has little momentum and is probably already in recession, Paul Dales, chief UK economist at Capital Economics wrote in a note.
The mid-cap FTSE 250 gained 0.8%.
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