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* Morrisons surges on takeover bid from private equity firm
* Capita gains on strong revenue forecasts
* FTSE 100 up 0.6%, FTSE 250 adds 0.6%
(Updates to close)
By Amal S
June 21 (Reuters) - London's FTSE 100 ended higher on
Monday, helped by gains in mining and industrial stocks, while
supermarket chain Morrisons was the top gainer on the mid-cap
index following a proposed takeover offer.
After falling as much as 0.98% to its lowest since May 19,
the blue-chip index retreated to end 0.6% up. Base and
precious metal miners, rose 0.9%
and 0.2% respectively.
The domestically focused mid-cap index advanced
0.6%.
Morrisons surged 34.6% on hopes U.S. private equity
firm Clayton, Dubilier & Rice (CD&R) might raise its proposed
offer, despite its initial proposal being rejected.
Meanwhile, a spike in inflation, which surged past the Bank
of England's target in May, further raised concerns among
investors that the central bank could pull back its monetary
support in a meeting due later this week.
However, the rate-setters look set to remain divided over
whether to pull the plug on their 875 billion-pound ($1.2
trillion) government bond purchase programme.
"We're not going to see central banks be in a rush to pull
the plug out on stimulus, we're still in a market where there's
going to be a healthy amount of accommodation," said Edward
Moya, senior analyst at Oanda.
"Investors right now are focusing on the prospects that
we're still going to have robust economic growth. And even
though the markets now are fully believing that we will see a
tapering of asset purchases, that's still not going to happen
most likely in the immediate future."
Industrials gained 1%, led by outsourcer
Capita, which rose 9% after it said it was on track to
post revenue growth for the first time in six years and agreed
to sell its 51% stake in Axelos.
"The index was also supported by strength in the dollar
against the pound, boosting the relative value of its
constituents' U.S. revenues," said Russ Mould, investment
director at AJ Bell in a note.
Dollar-earning consumer staples stocks, including British
American Tobacco, Reckitt Benckiser Group,and
Diageo Plc gained between 0.5% and 0.8%.
(Reporting by Shashank Nayar and Amal S in Bengaluru; editing
by Uttaresh.V)
