FTSE 100 hits 2-week high on commodities boost, Restaurant Group surges

The UK’s FTSE 100 touched a two-week high on Thursday, helped by a rise in energy and mining stocks as commodity prices climbed on hopes of fresh China stimulus, while Restaurant Group surged after accepting a takeover bid.

The commodity-heavy FTSE 100 added 0.8%, also helped by a pullback in the dollar, while the mid-cap index was up 0.5%.

The heavyweight oil and gas sector added 1.8%, while precious metal miners lead sectoral gains.

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Industrial metal miners gained 1.7%, while precious metal miners were up 2.0% as prices of metals such as copper and gold rose.

China is preparing to bring a new round of stimulus to help the economy meet the government’s annual growth target, Bloomberg News reported on Tuesday, citing people familiar with the matter.

Shares of Wagamama owner The Restaurant Group jumped 37.1% as the company agreed to a takeover by private equity firm Apollo Global for 506 million pounds ($623.44 million) after a year of financial struggles.

Also aiding the exporter-heavy FTSE 100, the pound weakened after data showed the UK economy grew in line with expectations in August, but shrank more than initially thought in July.

“August numbers came in as expected, but it still demonstrates how the burden of high borrowing costs and the wider cost of living crisis is weighing hard on consumer and company sentiment,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

Investors are now turning their focus to U.S. consumer inflation data, due later in the day, for more clues on the Fed’s interest rate outlook.

Among individual stocks, Mobico tumbled 27.2% to the bottom of the midcap index, after the transport firm lowered its profit forecast for the year and suspended dividends as it grapples with high costs.

Building materials supplier SIG cut its annual profit forecast, sending its shares tumbling to a near three-year low. The stock was last down 12.9%.

Barclays shares lost 2.6%. Chief Executive C.S. Venkatakrishnan said in a podcast sluggish deal activity and peaking interest rates could add to pressure on bank earnings.