LONDON: Britain’s FTSE 100 closed higher on Monday as surging oil prices boosted energy stocks, although concerns about inflation and several broker downgrades kept a check on its overall gain.
The commodity-heavy index rose 0.5%, hitting its highest level in more than two weeks, driven by gains in Shell and BP which both gained about 4.1%.
These tracked a jump of more than $4 in the price of crude oil after news that European Union governments will consider whether to impose an oil embargo on Russia.
Glencore and Anglo American also rose as an Australia ban on exports of alumina and aluminium ores to Russia drove London aluminium prices up nearly 5%.
Higher commodity prices have driven up mining and energy stocks, which have a big weight on the FTSE 100. As a result it has notched up a 0.7% gain so far this year, compared with a near 7% drop in the pan-European STOXX 600.
“This resilient performance has helped to put the UK back on the map for overseas investors looking to diversify their holdings,” Russ Mould, investment director at AJ Bell, said.
Shares in the London Stock Exchange Group fell 0.6% after it said it will sell its wealth management technology operations BETA+ for $1.1 billion to affiliates of Clearlake Capital Group and Motive Partners to cut its debt.
Antofagasta rose 8.1% after the miner said it had agreed to exit the Reko Diq project in southwestern Pakistan as its growth strategy was focused on the production of copper and by-products in the Americas.
But energy consultant Inspired slumped 9.1% after warning of a hit to earnings in case Russian state-owned energy firm Gazprom’s British arm shuts down.
The domestically focused midcap index slipped 0.7%, with travel and leisure, down 2.5%.
Balfour Beatty dropped 2.3% after Morgan Stanley downgraded it to “underweight,” while retail stockbroker Hargreaves Lansdown fell 2.3% after Jefferies cut it to “underperform”.