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Gold surge, Hastings buyout lift London stocks ahead of BoE meeting

(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.

FILE PHOTO: A man wearing a protective face mask walks past the London Stock Exchange Group building in the City of London financial district, in London, Britain, March 9, 2020. REUTERS/Toby Melville

A 17.7% surge for motor insurer Hastings HSTG.L drove the FTSE 250 .FTMC up 1.9%, after it agreed to be bought by Finland's Sampo SAMPO.HE and South Africa's Rand Merchant Investment (RMI) RMIJ.J.

Meanwhile, record high gold prices XAU= saw miners of the yellow metal rocket: Centamin Plc CEY.L and Hochschild Mining HOCM.L jumped 9.6% and 14.4%, respectively.

London's metals index .FTNMX1770 soared 5% to an over six-month high as mining giants BHP BHPB.L, Rio Tinto RIO.L, Glencore GLEN.L 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 BP.L and Royal Dutch Shell RDSa.L.

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 CCH.L rose 8.1% as its business recovered from April lows, while bookmaker William Hill WMH.L gained 8.9% on a first-half profit beat.

Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Saumyadeb Chakrabarty, Rashmi Aich and Alison Williams

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