FTSE 100 gains as commodity-linked stocks jump

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A worker shelters from the rain under a Union Flag umbrella as he passes the London Stock Exchange in London, Britain, October 1, 2008. REUTERS/Toby Melville

  • Sainsbury’s jumps on takeover talks
  • easyJet up on naming former RBS chief as chair designate
  • UK PMIs show slowdown in business activity in August
  • FTSE 100 up 0.3%, FTSE 250 off 0.04%

Aug 23 (Reuters) – London’s FTSE 100 ended higher on Monday after recording its worst week since February, as heavyweight energy and mining stocks jumped, while a drop in business activity raised worries of slower economic growth.

The blue-chip FTSE 100 (.FTSE) rose 0.3% with energy shares (.FTNMX601010) and miners (.FTNMX551020) leading the gains, both up 2.2% and 1.3% respectively.

Oil majors BP (BP.L), Royal Dutch Shell (RDSa.L) were among the top gainers as crude prices rebounded from a seven-day losing streak.

British supermarket group Sainsbury’s (SBRY.L) jumped 15.4% to the top of the FTSE 100 on reports that private equity companies were circling with a view to possibly launching bids of more than 7 billion pounds ($9.53 billion). read more

“The takeover chatter helps underling appeal of the UK supermarket sector to overseas bidders, following the battle for Morrisons, but further transactions could raise questions about having such key components of the country’s food security in the hands of overseas private equity firms,” said Danni Hewson, financial analyst at AJ Bell.

Strong commodity prices and dovish central bank policies have helped the FTSE 100 gain 10% so far this year, with the index set to end its first month above the 7,100-mark since January this year. However, surging COVID-19 cases and concerns of a slowing economy have also weighed on markets.

Britain’s post-lockdown economic bounce-back slowed sharply in August as companies struggled with unprecedented shortages of staff and materials, but strong inflation pressures cooled a bit, a survey showed. read more

The flash reading of the PMI index showed UK business activity slowed in August. It stayed above the 50-mark, indicating that UK business activity was continuing to expand, just at a slower pace than the previous month.

Pharmaceutical sector (.FTNMX402020) was the biggest drag weighed by AstraZeneca (AZN.L), down 1.2%, after the U.S. FDA gave full approval to its peer Pfizer Inc’s (PFE.N) COVID-19 vaccine for use in people over the age of 16. read more

The domestically focused mid-cap index (.FTMC) inched 0.04% lower, weighed down by real estate stocks (.FTNMX351020).

​ Among stocks, British airline easyJet (EZJ.L) gained 0.2% after it named former RBS Chief Executive Officer Stephen Hester as its chair designate. read more

Energy stocks help push ftse 100

Reporting by Shashank Nayar and Amal S in Bengaluru; Editing by Subhranshu Sahu, Uttaresh.V and Alison Williams

Our Standards: The Thomson Reuters Trust Principles.

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