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(Alliance News) - London stocks jumped into June following a long weekend, the FTSE 100 climbing nearly 60 points on Tuesday as it got a boost from its sizeable mining contingent.
The FTSE 100 index closed up 57.85 points, or 0.8%, at 7,080.46. The FTSE 250 ended up 191.04 points, or 0.8%, at 22,874.99, and the AIM All-Share closed up 2.67 points, or 0.2%, at 1,258.78.
The Cboe UK 100 ended 0.7% at 706.10, the Cboe UK 250 closed up 0.8% at 20,625.68, and the Cboe Small Companies ended 1.2% at 15,173.61.
In European equities on Tuesday, the CAC 40 in Paris ended up 0.7%, while the DAX 30 in Frankfurt rallied 1.0%.
"US and UK investors have returned from their holiday in bullish form, picking up where they left off on Friday," said Chris Beauchamp, chief market analyst at IG.
He noted: "In the UK commodity prices have driven the gains for the FTSE 100, thanks to the strong showing in the US and Chinese manufacturing PMIs."
China's general manufacturing purchasing managers' index - a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing economy - inched up to 52.0 in May from 51.9 in April.
The figure rose further above the 50.0 threshold, which separates growth from decline - indicating China's manufacturing sector expansion strengthened in May.
London-listed miners rallied following the figures. Anglo American, Antofagasta and Rio Tinto all advanced 4.0%.
China was not the only country to record a robust May manufacturing PMI result on Tuesday. Activity in the UK manufacturing sector saw record growth in May as Covid-19 restrictions eased.
The UK manufacturing PMI rocketed to 65.6 points in May, up sharply from 60.9 in April. The latest reading was revised slightly lower from the preliminary reading of 66.1, but easily beat July 1994's previous record high of 61.0.
Markit said conditions in the UK manufacturing sector improved at an "unprecedented rate" in May, as output growth strengthened and new orders rose at the quickest pace in the near three-decade survey history.
There was also good news from the eurozone, which saw its own manufacturing PMI jump to 63.1 in May, compared to 62.9 in April - its highest reading in survey history, which has been running since June 1997.
And records were also made in the US, as the Markit PMI jumped to 62.1 points in May from 60.5 in April. May's reading beat the flash estimate of 61.5.
"US manufacturers are enjoying a bumper second quarter, with the PMI hitting a new high for the second month running in May," said Chris Williamson, chief business economist at IHS Markit.
Though May's headline PMI figure was strong, business confidence dipped to a seven-month low over supply issue concerns.
A separate release from the Institute for Supply Management on Tuesday also revealed an improvement in US manufacturing activity in May.
The ISM PMI climbed to 61.2 in May from April's reading of 60.7. However, the ISM also noted supply shortages which, along with rising commodity prices and record-long lead times, are continuing to dent the manufacturing economy.
ING commented: "The US manufacturing sector continues to perform very strongly, but it is increasingly clear that supply constraints are holding back output and are pushing up prices."
Stocks in New York were mostly higher at the London equities close, but had trimmed early gains, with the Dow Jones was up 0.3%, the S&P 500 index up 0.1%, and the Nasdaq Composite down 0.2%. Markets in New York were shut on Monday for Memorial Day.
Amid Tuesday's risk-on mood, the US dollar eased back.
The pound was quoted at USD1.4178 at the London equities close Tuesday, up compared to USD1.4175 at the close on Friday.
The euro stood at USD1.2248 at the European equities close Tuesday, rising from USD1.2185 at the same time on Friday. Against the yen, the dollar was trading at JPY109.40, down compared to JPY110.00 late Friday.
Precious metal gold also benefited from a softer dollar. Gold was quoted at USD1,899.75 an ounce at the London equities close Tuesday against USD1,895.00 at the close on Friday.
Meanwhile, Brent oil was trading above the USD71 mark for the first time since early March. The North Sea benchmark was quoted at USD71.11 a barrel at the London equities close Tuesday from USD69.77 late Friday.
London-listed oil majors jumped, with BP shares closing up 2.8% and Royal Dutch Shell 'A' and 'B' shares ending 2.2% and 1.8% higher respectively.
Elsewhere in London, FTSE 250-listed Marks & Spencer fell 3.4% after Morgan Stanley cut the food, clothing and homewares retailer to Equal Weight from Overweight.
M&C Saatchi jumped 12% after reporting stronger-than-expected trading for the first four months of 2021, leading the board to anticipate results for the year ahead of consensus expectations. The advertising agency highlighted its "robust" new business performance, with clients including the first digital UK Census campaign, Tinder and Australian energy firm Origin.
Amigo slumped 12% after the guarantor loans provider said it is considering all options, including insolvency, after deciding not to appeal the rejection by the UK High Court of its scheme to settle compensation claims.
It is also considering the possibility of promoting another scheme of arrangement to avoid insolvency.
"The issues and challenges facing Amigo are complex, and Amigo will continue to liaise in the coming weeks with its regulator the Financial Conduct Authority to seek to address its concerns as quickly as possible," Amigo said.
The UK corporate calendar for Wednesday has full-year results from central and eastern Europe-focused airline Wizz Air and publisher Bloomsbury Publishing.
The economic calendar on Wednesday has German retail sales at 0700 BST and EU producer prices at 1000 BST.
Also out on Wednesday, due after the London market close, will be the results of the latest quarterly UK index review. ITV is poised to return to the FTSE 100 and Renishaw is set for a demotion to the FTSE 250. The changes will be calculated based on Tuesday's closing prices.
ITV shares gained 2.4%, to give the broadcaster a market capitalisation of GBP5.26 billion, while Renishaw ended 0.3% lower, with a market value of GBP4.02 billion.
By Lucy Heming; lucyheming@alliancenews.com
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