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FTSE 100 rallies as BP and mining stocks bounce

mining stocks

The blue chip index jumped 74.48 to 6811.54, a gain of more than 1%

The FTSE 100 staged a surprise rally following strong economic news from the US and a jump in BP and mining stocks.

Wall Street raced to new highs on Monday following news of a stronger-than-expected performance from its service industries last month, but the FTSE had been expected to start the week slowly, with a fall of 27.8 points to 6770.7.

The blue chip index jumped 74.48 to 6811.54 in early trading, a gain of more than 1%.

UK investors remain poised between those hoping for a more rapid opening up of the economy and others fearing that companies in locked-down sectors like hotels and leisure will find it hard to recover when they reopen.

Even if they have a bumper spring and summer, there are fears that many firms will be unable to bring in the cashflow they need to cope with the bills that have been piling up over the past year. Government support plans will come to an end later in the year, leaving many facing what they fear will be a cliff edge that even the biggest national spending splurge will be unable to bridge.

That said, Boris Johnson’s talk that England was “set fair” for restrictions to be further eased next month was taken positively, particularly with his view that some foreign travel may be possible from May 17.

EasyJet and IAG shares gained today, with British Airways owner IAG rising 2% and EasyJet up 1%.

Investors are also relatively cheery ahead of next week’s reopening of shops. Staycations are to be permitted for one household.

There is no change as yet to the June 21 deadline for legal limits on social contact to end, along with restrictions on numbers at weddings and funerals, with nightclubs also being allowed to reopen.

Traders on the IG platform were calling the oil price up 0.75% which could boost BP and Shell, staving off some of the losses the FTSE would otherwise endure.

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