- FTSE closes up 65.46 at 6,632.82
- Geopolitical tensions ease, sentiment improves
- UK home loans rise in June
techMARK 2,727.40 +1.23%
FTSE 100 6,632.82 +1.00%
FTSE 250 15,460.73 +1.43%
UK stocks registered a decent gain on Monday as investors took advantage of the bargains to be had following last week's declines and grew in confidence as geopolitical tensions eased somewhat.
After making a fairly steady climb throughout the day, the FTSE 100 ultimately closed 65.46 points higher at 6,632.82.
Capital Spreads dealer, William Nicholls, said: "The world's stock markets have started trading this week on much firmer footing following a dire start to August. The relief rally from Friday seems to be holding for now as various geo-political tensions come off the boil somewhat.
"A three day cease-fire in Israel and an end to Russia's Braveheart-style 'Ukraine baiting' on the edge of its border has put an end to the selling. It seems investors have decided that enough is enough and the risk-on button has been pressed."
A 72-hour ceasefire in Gaza, the end of Russian military exercises near eastern Ukraine and the news that US air strikes have aided Kurdish forces in northern Iraq have have together helped to rebuild confidence over the weekend.
In the latest geopolitical developments, Iraq's president on Monday asked Haider al-Abadi, the Shi'ite coalition's nominee for prime minister, to form a government.
The US has conducted three separate air strikes in the northern region of the country and, alongside Turkey and Britain, have also provided food and water supplies to more than 40,000 members of the Yazidi religious minority who are under the threat of Islamic State, formerly known as Isis, militants.
UK home loans rise in June despite mortgage crackdown
Back in Britain, data revealed that mortgage loans rose in June, defying expectations of a slowdown following a clampdown on irresponsible lending.
Total gross lending in June grew by 6% against May to £17.9bn and by a fifth against a year ago, according to Bank of England figures cited by the Council of Mortgage Lenders (CML).
It comes despite measures to ensure home-buyers can repay loans, such as the Mortgage Market Review, which obliged lenders to take more account of borrowers' ability to pay.
In other macro news, UK wage growth is expected to remain weak in the next three months, the Chartered Institute of Personnel and Development (CIPD) said.
Only 2% of employers saw their starting salaries rise in the last 12 months, against 2.5% in 2013, according to the quarterly survey of 1,026 employers and recruitment professionals.
The proportion of employers who expect basic pay to increase at their organisation has fallen to 42% from 48% in the last quarter.
Miners drive FTSE higher
The mining sector performed well with heavyweights such as Rio Tinto, Glencore and Anglo American making gains. Rio was supported by comments from Canaccord Genuity, which repeated its 'buy' rating on the back of the miner's strong free cash flows in the first half.
Airlines Easyjet and IAG also rose strongly.
Meanwhile, Deutsche Bank lowered its recommendation for Friends Life Group from 'buy' to 'hold', saying it sees worse-than-expected underlying trends at the life assurance firm.
Royal Bank of Scotland was down on reports it is set to sell the international branch of Coutts, its private bank, in a deal thought to be valued at around $1bn (£600m). RBS's decision will see Coutts split into two separate businesses, with one to be based in Britain and one to be based in Zurich, from where it'll manage operations in Dubai, Abu Dhabi, Singapore and Hong Kong.
Standard Chartered declined after Nomura reduced its target price from 1,580p to 1,480p, maintaining a 'buy' recommendation.
On the second tier, chemicals group Synthomer cheered investors with a 25% jump in the interim dividend, which came despite a drop in half-year sales amid challenging market conditions. The company also said it anticipated delivering underlying full-year profit in line with last year's figure of £90.1m.
At the other end, Drax extended losses made last week which came after losing its appeal over its eligibility for a government contract. UBS said on Monday that the news "has reduced the potential valuation upside for Drax" as it downgraded the stock from 'buy' to 'neutral', while reducing its target price from 800p to 680p.
FTSE 100 - Risers
Persimmon (PSN) 1,272.00p +4.52%
International Consolidated Airlines Group SA (CDI) (IAG) 331.20p +4.45%
Ashtead Group (AHT) 906.50p +4.26%
Schroders (SDR) 2,295.00p +3.71%
Rio Tinto (RIO) 3,502.00p +3.61%
Anglo American (AAL) 1,602.50p +3.32%
Shire Plc (SHP) 4,764.00p +3.14%
Petrofac Ltd. (PFC) 1,109.00p +3.07%
Johnson Matthey (JMAT) 3,000.00p +2.85%
G4S (GFS) 260.90p +2.68%
FTSE 100 - Fallers
Royal Bank of Scotland Group (RBS) 339.60p -1.74%
Morrison (Wm) Supermarkets (MRW) 166.80p -1.65%
Friends Life Group Limited (FLG) 315.00p -1.35%
Randgold Resources Ltd. (RRS) 5,075.00p -0.68%
RSA Insurance Group (RSA) 425.60p -0.61%
Legal & General Group (LGEN) 237.00p -0.34%
Meggitt (MGGT) 471.00p -0.28%
Hargreaves Lansdown (HL.) 1,081.00p -0.28%
Tesco (TSCO) 246.30p -0.28%
HSBC Holdings (HSBA) 625.90p -0.26%
FTSE 250 - Risers
Synthomer (SYNT) 225.20p +8.32%
Ferrexpo (FXPO) 136.30p +5.91%
IP Group (IPO) 187.80p +5.80%
Enterprise Inns (ETI) 120.00p +5.26%
BTG (BTG) 608.00p +4.65%
Just Eat (JE.) 219.50p +4.57%
Michael Page International (MPI) 451.90p +4.12%
Ocado Group (OCDO) 343.00p +3.97%
Regus (RGU) 180.00p +3.69%
Amec (AMEC) 1,108.00p +3.65%
FTSE 250 - Fallers
Euromoney Institutional Investor (ERM) 1,055.00p -3.03%
Drax Group (DRX) 639.50p -1.77%
Foxtons Group (FOXT) 259.10p -1.48%
COLT Group SA (COLT) 135.00p -1.39%
Countrywide (CWD) 509.00p -1.17%
St. Modwen Properties (SMP) 372.60p -0.90%
Supergroup (SGP) 1,014.00p -0.88%
NMC Health (NMC) 471.00p -0.84%
Stock Spirits Group (STCK) 296.50p -0.77%
Renishaw (RSW) 1,669.00p -0.65%