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British FTSE 100 higher as miners, oil majors strengthen
February 12, 2019
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LONDON: British blue-chip shares bounced back on Monday buoyed by strength in global miners and oil shares, while the dollar climbing to a near six-week high lifted companies with greater international exposure.

The main index was 0.8 per cent higher by 0846 GMT while the midcaps were up 0.6 higher after ending lower on Friday as fresh concerns over the Sino-U.S. trade situation added to fears of a slowdown in the world economy.

Monday’s rise in FTSE 100, coming after three sessions of losses, marked a strong start for the week in which British Prime Minister Theresa May is due to update parliament on her progress towards a divorce deal while the country’s gross domestic product numbers are set to be released today (Tuesday).

Miners climbed to their highest since November with Chinese iron ore futures at record highs on concerns that supply from Brazil, the country’s second-largest ore supplier, may decline after a fatal dam accident at a Vale mine.

Travel group TUI’s London-listed shares jumped 3 per cent to top the FTSE 100 leader-board as traders cited Bank of America Merrill Lynch resuming coverage with “Buy” rating. The gains erase some of the steep losses last week after poor results.

Takeaway group Just Eat rose 2 per cent after its shareholder Cat Rock Capital Management urged the company to start merger talks and said it would benefit from a deal rather than relying on a new chief executive officer.

Elsewhere, Chinese shares rose ahead of a new round of trade talks with the United States that started on Monday. Asia-focussed bank HSBC rose 1.5 per cent to be the biggest support to the blue-chip index.

Oil majors BP and Shell were also among top boosts on the back of higher crude prices.

Smith & Nephew slid 3.5 per cent and was the worst FTSE 100 performer. The Financial Times reported that it has held talks to buy U.S.-based medical equipment maker NuVasive in a deal that would be worth more than $3 billion.

Playtech, the gambling software company which fell last week as horse racing was postponed in Britain after an outbreak of equine influenza, slipped 4 per cent. Traders cited a BofA Merrill Lynch rating cut.

Meanwhile the Davy Research says Brexit, tighter financial conditions and political uncertainties are now weighing on UK GDP growth. Davy Research cuts UK GDP growth forecast to 1.0 per cent in 2019.

Gains in heavyweight miners and banks helped European shares recover on Monday as investors turned their focus to the start of a new round of trade talks between Beijing and Washington.

The pan-regional STOXX 600 index rose 0.9 per cent by 0931 GMT, having fallen to one-week lows on Friday amid worries over an economic slowdown and lack of progress in the trade negotiations.


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