LONDON: The British mid-cap stock index rose to a record high on Tuesday, helped by gains in industrials and consumer discretionary stocks, while an upbeat reading on factory activity infused confidence on the economic recovery.
The domestically focused mid-cap FTSE 250 index advanced 0.8% as a deluge of new orders helped drive a record increase in British manufacturing activity last month as the economy began to recover from the Covid-19 pandemic.
The blue-chip index climbed 0.8%, with base metal miners gaining 3.7% as they tracked higher copper and iron ore prices.
Oil majors BP and Royal Dutch Shell added more than 1.2% each after Brent crude topped $70-mark on favourable demand outlook.
“UK markets has been the big beneficiary of inflation trade since it is a heavily weighted market with the commodity sector. At the same time, it’s underperforming when compared to the rest of Europe,” said Keith Temperton, a sales trader at Forte Securities.
Mortgage lender Nationwide said British house prices jumped by an annual 10.9%, the most in nearly seven years, apparently set to accelerate further as people seek new homes after the pandemic. The wider homebuilders index rose 2.1%. The FTSE 100 index has traded in a tight range since April as concerns grew that central banks might pare support early as economies reopen and inflation climbs.
Among other stocks, Wickes Group added 4.7% after the do-it-yourself retailer said its full-year profit would be in the upper half of analyst expectations after sales surged in April.
M&C Saatchi jumped 12.1% after the advertising agency forecast upbeat annual results on new robust campaigns. Travel food group SSP Group rose 3.0% after Peel Hunt upgraded the stock to “add” on potential growth from European air market opening.