Key Takeaways
- UK's FTSE 100 index rose 0.19% to 10,481.20 points.
- Mining shares led gains, with precious metal miners up 0.55%.
- Brent crude futures dipped 0.19% to $102.04 a barrel.
The UK's FTSE 100 index recovered on Monday, rising 0.19% to 10,481.20 points, following its steepest drop since April last week. The midcap FTSE 250, however, dipped 0.32% to 24,114.77 points.
Mining shares were the primary driver of the gains, with precious metal miners rising 0.55%. This was reflected in the price of spot gold, which jumped 0.35%, and silver, which increased by 2.06%.
Brent crude futures experienced a slight decline, dropping 0.19% to $102.04 a barrel, amid increased exports from the Middle East and pledges from the Group of Seven to boost supplies. However, the ongoing conflict between Yemen’s internationally recognised government and Iran-backed Houthis continued to keep investors on edge.
A survey revealed that British services firms reported stronger cost pressures last month, driven by a surge in fuel prices due to the Middle East conflict. Fuel prices have been a significant concern, as they impact inflation expectations and the Bank of England’s interest rate trajectory.
Economists at Pantheon Macroeconomics noted that energy prices have risen too sharply, and a rate hike at the next central bank meeting in November is now nearly certain, with a 95% chance of a rate hike, according to data compiled by LSEG.
Ithaca Energy was the top gainer on the FTSE 100, rising 3.5% after agreeing to acquire Suncor Energy’s offshore oil assets for $842 million in upfront cash. This deal provided a level of diversification for the industry, which has faced challenges with the fiscal and regulatory set-up in the UK.
Despite the recovery, investment firm 3i Group saw its value decline, hitting its lowest level since late June, down 4.4%.
