Gold surge, Hastings buyout lift London stocks ahead of BoE meeting
Reuters
Published Aug 05, 2020 08:29
Updated Aug 05, 2020 17:40
By Sagarika Jaisinghani and Susan Mathew
(Reuters) - Surging prices for gold and other metals and a $2.2 billion buyout offer for Hastings Group saw London's mid-cap index post its best session in seven weeks on Wednesday, with some upbeat earnings and economic data also aiding sentiment.
A 17.7% surge for motor insurer Hastings (L:HSTG) drove the FTSE 250 (FTMC) up 1.9%, after it agreed to be bought by Finland's Sampo (HE:SAMPO) and South Africa's Rand Merchant Investment (RMI) (J:RMIJ).
Meanwhile, record high gold prices
London's metals index (FTNMX1770) soared 5% to an over six-month high as mining giants BHP (L:BHPB), Rio Tinto (L:RIO), Glencore (L:GLEN) rallied on rising copper and iron ore prices.
The blue-chip FTSE 100 (FTSE) gained 1.1% with a five-month high for crude prices lifting oil majors BP (L:BP) and Royal Dutch Shell (L:RDSa).
On the data front, a survey showed British businesses grew at the fastest pace in 5 years in July after a COVID slump, while in the United States, the services sector expanded and private payrolls increased far less last expected last month.
Investors also eyed signs of progress in a U.S. fiscal relief bill.
Historic global stimulus has helped British stock markets roar back from the pandemic-fuelled crash in March, but the indexes have struggled as a rise in cases threaten further lockdowns.
The Bank of England is due to announce its next policy decision at 0600 GMT on Thursday with some early macroeconomic figures signalling a pickup in the housing and auto industries with the easing of business restrictions.
"The BoE will have to do considerably more quantitative easing than it already has to stimulate demand and boost inflation back to its 2% target," said Paul Dales, chief UK economist at Capital Economics.
Among earnings-driven moves, soft drinks bottler Coca-Cola HBC (L:CCH) rose 8.1% as its business recovered from April lows, while bookmaker William Hill (L:WMH) gained 8.9% on a first-half profit beat.
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.