June 1 (Reuters) – British equities gained in a broader market rally on Thursday with higher metal prices supporting miners, while progress on the bill to lift the U.S. debt ceiling further spurred risk appetite.
The internationally-focused FTSE 100 (.FTSE) gained 0.6% as the U.S. debt ceiling bill successfully passed through the House of Representatives and was headed for a vote in the Senate.
“The fact that it looks like the world can put the U.S. debt ceiling silliness behind is certainly a modest positive,” said Steve Sosnick, chief strategist at Interactive Brokers.
Industrial metal miners (.FTNMX551020) rose 2.1% as base metal prices appreciated.
Heavyweight energy stocks (.FTNMX601010) advanced 1.4%, spurred on by higher oil prices.
The mid-cap FTSE 250 (.FTMC) also added 0.6%, though cutting gains was Dr Martens (DOCS.L) which slumped 11.7% after the bootmaker warned that the U.S. is expected to be toughest market for the firm this year.
UK equities had a disappointing finish to May, with the FTSE 100 losing 5.4% and the midcap index falling 3.6% as a mix of domestic factors such as inflation, rate hikes and global uncertainties including the U.S. debt deal and fears of an economic slowdown unnerved investors.
Domestic house prices fell by the most since 2009 in May, according to Nationwide. The mortgage lender expects the country’s housing market to face headwinds in the months ahead.
Beaten-down homebuilders (.FTNMX402020) gained 1.7% after eight straight sessions of losses.
Among other movers, Johnson Matthey (JMAT.L) added 1.9% on a report to sell its medical device components business.
Convatec (CTEC.L) added 3.1% after Morgan Stanley upgraded the medical technology firm to “overweight” from “equal weight”.
An industry survey showed Britain’s manufacturing output fell for a third month in a row in May and new orders declined at the fastest pace in four, but there were signs that the worst of the inflation surge may have passed.
Reporting by Johann M Cherian and Shashwat Chauhan in Bengaluru; Editing by Varun H K and Andrew Heavens
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