(Reuters) - Britain’s FTSE 100 index recorded its strongest performance since late March on Monday as investors bet on a faster recovery from a coronavirus-driven recession.
The FTSE 100 .FTSE closed up 4.3% after ending Friday with its first weekly slide in three. BP Plc (BP.L) and Royal Dutch Shell Plc (RDSa.L) gained more than 8% each, as signs of higher demand drove oil prices to a one-month high. [O/R]
“Currently, it’s very sentiment driven because it’s all about reopening and rather than closing,” said Stefan Koopman, senior markets economist at Rabobank.
“It feels like investors have a fear of missing out and they just want to join this rally. That’s why it’s very broad based and led by sectors that are most strongly hit by the shutdown.”
The mining index .FTNMX1770 surged 8.1%, also recording its biggest one-day percentage gain in nearly two months, tracking commodity prices higher, while the domestically focused FTSE 250 .FTMC rose 3.6%. [MET/L]
Precious metals miner Hochschild (HOCM.L) jumped 12% after saying it would restart its Peru operations in the coming weeks.
Trillions of dollars in global stimulus helped the FTSE 100 rebound in April from a coronavirus-fuelled selloff in March, but gains in May have been tempered by growing evidence of the economic havoc already wrought by the health crisis.
A survey on Monday showed the number of Britons visiting shops collapsed in April due to a nationwide lockdown, while the head of the country’s budget forecasting office warned UK economic output could have slumped more than 30% last month.
The banking index .FTNMX8350 was among the smallest gainers of the day as a report cited the Bank of England’s chief economist as saying the central bank was looking more urgently at negative interest rates to prop up the economy.
With the shutdown in economic activity putting millions out of work globally, investor attention will be on UK employment data due Tuesday, before turning to inflation and business activity data later in the week.
London-listed shares of Ryanair Holdings Plc (RYA.L) jumped 15.8% after Europe’s largest low-cost carrier announced details of sharp cost cuts and promised a swift return to full capacity and expansion.
In contrast, mall operator Intu Properties Plc (INTUP.L) fell 4.3% after warning it would likely breach its debt commitments at the end of June due to falling rental payments.
Reporting by Shreyashi Sanyal, Devik Jain and Sagarika Jaisinghani in Bengaluru; Editing by Shounak Dasgupta and Jane Merriman