FTSE 100 bounces back in response to rising oil price
London's blue-chip index bounced back on Monday as investors piled into commodity stocks in response to the rising oil price.
The FTSE 100 Index climbed 64.37 points to to 7,377.09, driven by a strong performance from the mining giants, with Glencore soaring 5%, or 14.4p, to 301.6p.
Oil major BP was also in the ascendency, up 8.5p to 451.3p, as Brent crude rose 1.4% to 49.44 US dollars a barrel.
David Madden, market analyst at CMC Markets, said traders were taking encouragement from a raft of data pointing to weaker US oil production.
He said: "Brent crude oil continued (its) push higher as the positive sentiment around the energy markets continues.
"The Baker Hughes rig count report showed the number of active rigs in the US dropped by two to 752 rigs, but compared to this time last year, the number of active rigs in the US is still up 121%.
"The marginal decline in US oil production last week spurred on buyers. There is a sense that the huge drop oil suffered between May and June was overdone, and the turnaround in oil is just correction within the wider downward trend."
Across Europe, Germany's Dax was up 1.2% and the Cac 40 in France pushed 1.5% higher.
On the currency markets, the pound took a tumble after the latest update on Britain's manufacturing industry came in shy of expectations.
Sterling was down 0.5% versus the US dollar at 1.294, with a slowdown in new orders causing industry output to drift to a three-month low.
The closely watched Markit/CIPS UK Manufacturing purchasing managers' index (PMI) showed a reading of 54.3 last month, down from 56.3 in May and below economists' forecasts of 56.4.
A reading above 50 indicates growth.
The pound was also marginally down against the euro at 1.138.
In UK stocks, Britain's banking giants enjoyed a strong session, as investors priced in comments from Bank of England governor Mark Carney on Wednesday suggesting interest rates could rise.
He said: "Some removal of monetary stimulus is likely to become necessary," but it would depend on whether a drop in household spending is countered by more companies ploughing money back into their businesses.
Royal Bank of Scotland skipped 3% higher, up 8.3p to 255.5p, and HSBC rose 18.10p to 729.8p.
The prospect of an interest rate hike boosts banking stocks because it suggest lenders will be able to charge customers more for their financial products.
On the second tier, fashion retailer SuperGroup raced ahead after a 53.1% rise in pre-tax profits to £84.8 million for the 52 weeks to April 29.
Shares were up 41p to 1,536p as the firm also revealed that sales rose 27.4% to £752 million.
It came as the owner of the Superdry brand also announced p lans to launch a chain of standalone sportswear stores as it looks to cash in on the lucrative fitness market.
The biggest risers on the FTSE 100 Index were Glencore up 14.4p to 301.6p, Rio Tinto up 132.5p to 3,374.5p, Anglo American up 41p to 1,065p, and Royal Bank of Scotland up 8.3p to 255.5p.
The biggest fallers were Provident Financial down 65p to 2,368p, Micro Focus International down 42p to 2,229p, Hargreaves Lansdown down 21p to 1,281p, and Morrisons down 3.6p to 237.6p.