FTSE 100 rises as mining, banking shares gain

Britain's top share index climbed on Monday, after falling in the previous two sessions, with basic resources stocks leading the market higher as prices of industrial metals such as copper rose. European share indexes largely shrugged off Italian Prime Minister Matteo Renzi's resignation after he lost a referendum on constitutional reform on Sunday.
British stocks underperformed most continental markets. The bluechip FTSE 100 index gained 0.2 percent compared with a rise of 0.6 percent on Europe's STOXX 600. The FTSE had slipped 0.3 percent in the previous session and 0.5 percent on Thursday. The benchmark index is up more than 8 percent so far this year. "Despite a 'No' referendum vote in Italy, markets held up rather well. UK banks have seen some buying interest on expectations the sector may have seen the worst, while miners are boosted by higher metals prices and Citi's bullish outlook on the sector," said Jawaid Afsar, senior trader at Securequity.
Prices of copper and zinc surged by more than 3 percent, thanks in part to a slide in the dollar and buying by computer-driven funds. Citigroup upgraded its stance on Western European miners to "bullish" from "bearish", saying a more robust outlook for the commodity complex in 2017 was likely to lead to cash flow and earnings upgrades. Citigroup raised its rating on BHP Billiton to "buy" from "sell", on Glencore to "buy" from "neutral" and on Rio Tinto and Anglo American to "neutral" from "sell".
Shares in copper miner Antofagasta gained 4.9 percent, the FTSE 100's best performer. BHP Billiton, Rio Tinto and Glencore rose 1.6 to 4.4 percent. The wider UK mining index was up 2.4 percent. British banks also gained, with some investors taking advantage of the sector's decline to a three-week low. The sector index was up 0.5 percent, boosted by 2.3 percent and 1.8 percent gains in shares of Royal Bank of Scotland and Barclays respectively.
Precious metals miners, however, came under pressure after the price of gold fell by around 1 percent. Shares in Fresnillo, Randgold Resources and Polymetal International dropped by 2 to 4 percent. On the macroeconomic front, a survey showed businesses in Britain's services sector grew last month at their fastest pace since January, and the broader economy kept up its momentum in late 2016, even if firms have some worries about the year ahead.