Stimulus hopes lift FTSE 100; miners, industrials jump

London's FTSE 100 rose on Monday, led by mining and industrial stocks, as demand for risky equities globally returned on the prospect of central banks sticking to loose monetary policies amid signs of a slowdown in global growth.

The export-heavy FTSE 100 was up 0.5% by 0744 GMT, with mining stocks gaining 0.7% as aluminium prices hit their highest in more than 10 years.

Insurance and personal goods stocks were also among the biggest gainers in morning trading.

The FTSE 100 had ended last week essentially flat as macroeconomic data suggested Britain's economic recovery from the pandemic lost more momentum in August, a trend that was mirrored across the Atlantic with a dismal US jobs report.

On Monday, Asian shares hit six-week peaks as the chance of low US interest rates and talk of more stimulus in Japan and China lifted sentiment, although analysts cautioned that the US Federal Reserve could still lay out a timeline to taper bond purchases at its meeting this month.

"It is becoming increasingly clear from the data that the US economy has hit a bit of a soft patch ... (but) if, as expected, this trend turns out to be temporary then it is unlikely to make that much difference to the Federal Reserve's plans to start tapering its bond purchase program," said Michael Hewson, chief market analyst at CMC Markets UK.

"That will still happen, with the only question being over the timing."

The British mid-cap index lagged the broader market as data showed new car registrations in the UK fell 22% year on year in August.

Energy stocks were also weighed down by a $1 fall in oil prices.

Trading volumes are expected to be thin on Monday with the US stock market closed for a local holiday.