Stocks in London pushed higher on Friday, rebounding from a selloff in the U.S. that spread across European markets this week, though shares in a number of major mining companies dragged on gains.
The FTSE 100
the index of London’s top stocks by market capitalization, rose 0.7%, with most of its constituents notching gains.
But shares in mining giants Rio Tinto
which are all major producers of copper or iron ore, stood out as fallers in London, as there was a decline in the prices of those commodities. Copper futures
were down 1% while iron ore futures
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A decline in commodities prices — including benchmark Brent
crude, which fell from near $70 a barrel on Wednesday to below $67 on Thursday, with the price of oil now pushing closer to $68 — came as stocks rallied. Equities across Europe were rebounding from days of declines from the beginning of the week, which were largely driven by U.S. inflation fears.
Wall Street enjoyed a strong rally on Thursday, reversing a near 4% fall on the S&P 500
index over the week, with stocks in London playing catch-up on Friday.
“It has been a turbulent week as the scepter of inflation once again spooked investors however it looks like last night’s Wall Street rally is providing a port in a storm for the FTSE 100 as it enjoyed a solid bounce on Friday morning,” said Russ Mould, an analyst at AJ Bell.
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The analyst highlighted the risk from the COVID-19 situation in India, as the U.K. looks to further open up after months of lockdowns and ease travel restrictions.
“Keeping cases of the so-called Indian variant of COVID-19 under control is something the U.K. is facing up to and it is prompting some concern that the next phase of reopening might be delayed, or localized restrictions introduced. This uncertainty could hit the hospitality and travel sectors,” Mould warned.
However, travel and tourism stocks remained resilient on Friday, with shares in airline IAG
— which owns British Airways, Aer Lingus, and Iberia — rising, along with low-cost carriers easyJet
and Wizz Air
Hotel operators Whitbread
and InterContinental Hotels Group
Shares in U.K. enterprise software group Sage
rose 3.5% — the biggest gainer on the FTSE 100 — after posting half-year results with earnings per share ahead of analyst expectations. The group also guided that its margins would trend upward beyond 2021.
Shares in Sanne
a U.K. asset management services group and constituent of the midcap FTSE 250
index, soared 21% higher, after its board rejected a £1.35 billion ($1.9 billion) buyout proposal from private-equity group Cinven.