FTSE 100 grows as commodity prices rise; Melrose makes money on unit sales

FTSE 100 grows as commodity prices rise;  Melrose makes money on unit sales

The FTSE 100 in London gained on Monday, riding a surge in commodity companies, while Melrose Industries, a jet and auto parts supplier, jumped on a contract to sell a subsidiary for $650 million. As trading resumed after a long holiday weekend to honour Queen Elizabeth’s Platinum Jubilee, the blue-chip index rose 1.0 percent, while the domestically focused FTSE 250 rose 1.2 percent.

“Markets are unfazed by the political shenanigans unfolding at Westminster – there is a vast ocean of blue water between a vote of no confidence being called, and a new prime minister picking out wallpaper for number 10,” said Danni Hewson, a financial analyst at AJ Bell. Prime Minister Boris Johnson was due to face a confidence vote called by members of his Conservative Party.

Miners Rio Tinto and Glencore rose 1.6% and 4%, lifting the broader mining sector, as copper prices rallied to five-week highs on hopes of stronger demand from China after the top metals consumer lifted COVID-19 curbs. Oil majors BP and Shell added 2.1% and 1.4%, respectively, tracking a rally in Brent crude to above $120 a barrel after Saudi Arabia hiked prices for its crude sales in July.

Johnson was expected to survive the vote, called after a growing number of lawmakers in the governing Conservative Party questioned the British leader’s flagging authority over the “partygate” scandal. In the year so far, the FTSE 100 has risen 3.4% thanks to surging oil and metal prices, while the midcap FTSE 250 has declined 13% on concerns that rapid inflation could spark an economic slowdown.

This week, investor focus is on a European Central Bank policy meeting on Thursday and U.S. consumer price data due on Friday. On Monday, nearly all sectors on the FTSE 100 traded in positive territory, with the biggest boosts coming from homebuilders and miners. Melrose Industries Plc rose 3.3% after agreeing to sell its Ergotron unit, which makes ergonomic desks and office accessories, to funds managed by U.S.-based Sterling Group.

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