U.K. stocks advanced Thursday, as gains for mining shares helped London’s major equity benchmark prepare to seal a win for May.
How markets are performing
The FTSE 100 index
UKX, +0.10%
picked up 0.3% to 7,710.38, led by the basic materials group but the utilities sector lagged behind. On Wednesday, the benchmark rose 0.8%.
Trading in May looks set to leave the FTSE 100 up by 2.7%. That would add on to April’s leap of 6.4%, a move aided by pound weakness.
The pound
GBPUSD, +0.2710%
bought $1.3335, up from $1.3283 on Wednesday in New York. Sterling faced a loss of more than 3% against the dollar for May.
What’s driving the market
U.K. stocks rose alongside gains in the broader European equity market
SXXP, +0.02%
as investors waited for fresh developments out of Italy and Spain, each of which are dealing with strife in their political landscapes. Italian stocks
I945, +0.59%
pushed higher Thursday after the head of the 5 Star party, Luigi Di Maio, said he was open to withdrawing Paolo Savona as a candidate for finance minister. Earlier this week, Italian President Sergio Mattarella rejected Savona as candidate for that post, effectively blocking a coalition of euroskeptic parties 5 Star and League from forming a government.
Read: Here’s why markets are worried about Italian politics — again
In Spain, lawmakers were to begin formal debate Thursday over whether to hold a no-confidence vote Friday on Prime Minister Mariano Rajoy. The Socialist Party is expected to win support for the vote, which could lead to the ouster of Rajoy’s minority center-right government. The Socialists called for the vote after a corruption case ended in convictions for senior members of Rajoy’s People’s Party.
The FTSE 100 will undergo a quarterly makeover effective in June. Online grocer Ocado Group PLC
OCDO, +0.23%
and gaming company GVC Holdings PLC
GVC, +0.39%
will be added to the top-flight index, FTSE Russell said Wednesday. The names will replace security company G4S PLC
GFS, +0.11%
and Mediclinic International PLC
MDC, +1.69%
after the close of business on June 15.
What strategists are saying
“Fears over an Italian snap election have receded today, amid talks between the new interim prime minister and the populist parties over a potential coalition deal that would avoid a return to the polls,” wrote IG market analyst Joshua Mahony.
“Markets are going to be hugely sensitive to the prospect of a new election, and if they manage to put together a coalition without a new vote, nor the staunchly anti-EU finance minister Paolo Savona, this would be the ideal outcome for markets,” he said.
Stock movers
Mining shares were higher as the dollar
DXY, -0.11%
pulled back, aiding gains for dollar-denominated metals prices. Anglo American PLC
AAL, +0.94%
rose 1.1%, Glencore
GLEN, +0.99%
moved up 1% and Randgold Resources Ltd.
RRS, +0.58%
gained 0.6%.
Mining stocks appeared to take in stride the possibility that the U.S. is ready to make good on its threat to slap tariffs on European steel and aluminum. An announcement from the White House could come as early as Thursday, sources said, with the tariffs scheduled to come in Friday as a one-month reprieve lapses.
Johnson Matthey PLC
JMAT, +0.32%
was up 1.2% after the maker of automotive catalysts raised its final dividend even as fiscal 2018 pretax profit fell 31% because of restructuring costs and a legal-settlement charge.
Shares of Firstgroup PLC
FGP, -12.27%
sank 15% on the mid-cap FTSE 250 index as the transportation company unexpectedly swung to a fiscal 2018 pretax loss and said Chief Executive Tim O’Toole is stepping down.
The FTSE 250
MCX, +0.38%
was up 0.4% at 20.901.29 and was on track for a 3% rise for May.
Economic data
The amount U.K. consumers borrowed in April jumped to £1.8 billion, the Bank of England said Thursday, rebounding from March’s level, which was lowest in more than five years. Mortgage lending, however, slipped to £3.9 billion from £4.0 billion in March.
Source : MTV
