(Alliance News) - Equities in London kicked off the new week in bullish fashion, clawing back some of last week's sizeable losses on Monday, with financial and oil stocks among those leading the way.
The likes of HSBC, Shell and BP ensured the FTSE 100 outperformed European peers. The CAC 40 nudged higher, though gains in Paris were capped by the result of a French legislative election which saw President Emmanuel Macron lose his parliamentary majority.
Financial markets in the US are closed on Monday in observance of the maiden Juneteenth public holiday.
The FTSE 100 index closed up 105.56 points, or 1.5%, at 7,121.81. The blue-chip index had shed 4.1% last week.
The FTSE 250 ended up 84.91 points, or 0.5%, at 19,010.82. The AIM All-Share closed down 3.80 points, or 0.4%, at 897.17.
The Cboe UK 100 ended up 1.7% at 709.51, the Cboe UK 250 closed up 0.3% at 16,704.54, and the Cboe Small Companies ended down 0.8% at 13,689.01.
In European equities on Monday, the CAC 40 stock index in Paris closed up 0.6%, while the DAX 40 in Frankfurt finished 1.1% higher.
"European markets have enjoyed a decent start to the week in the absence of US markets with the FTSE 100 leading the way higher," CMC Markets analyst Michael Hewson commented.
Markets were bolstered by US Treasury Secretary Janet Yellen saying a recession in the US is not "inevitable". Yellen, however, warned the economy is likely to slow.
The dollar lost out at the start of the week.
The euro was priced at USD1.0528 late Monday, up from USD1.0465 at the same time on Friday. Against the yen, the dollar was trading at JPY135.03, lower against JPY135.17.
The pound was quoted at USD1.2246 late on Monday, up from USD1.2211 at the London equities close Friday. Cable had hit an intraday high of USD1.2279.
Sterling received a boost from hawkish comments from a Bank of England policymaker.
The BoE should lift interest rates in chunkier instalments as a flailing pound is heaping more inflationary pressure on the UK, Catherine Mann said on Monday.
Mann was one of three members of the BoE's nine-strong Monetary Policy Committee to vote for a 50 basis point rate increase at last week's meeting.
In the end, the BoE voted to raise the Bank Rate by a quarter-point to 1.25%.
IG analyst Chris Beauchamp commented: "Catherine Mann's strong talk today gave the pound a lift against the dollar for a while today, although the aforementioned lack of US trading means the moves should not be given too much weight. She clearly wants a more aggressive policy, and it might indeed move the dial a touch on inflation, but it is far from clear that the UK economy could weather such a strong-arm policy."
The London-listed banking sector was also on the up following Mann's comments. HSBC shares rose 5.8%, one of the best FTSE 100 performers. Lloyds added 3.8%, while Virgin Money climbed 1.7%.
Elsewhere in London, BP and Shell rose 3.1% and 3.3%, also boosting the FTSE 100. The oil majors clawed back some of Friday's hefty share price falls, despite Brent prices declining.
Brent oil was quoted at USD113.70 a barrel late on Monday, down from USD114.22 late Friday.
Euromoney jumped 26%, the best FTSE 250-listed performer. Shares ended at 1,382.00 pence.
The business information publisher and events organiser confirmed it received an approach from a consortium of Astorg Asset Management and Epiris regarding a possible cash offer at 1,461 pence per Euromoney share, valuing the company at GBP1.6 billion.
Rank Group, which exited the FTSE 250 after an index review came into force, tumbled 15% at the start of the week. Shares were hit hard after it downgraded annual earnings guidance again, citing soft demand for its Grosvenor casinos.
The Maidenhead-based firm said performance across its Grosvenor casinos was "considerably weaker than expected" since its last trading update in late April.
Consequently, Rank Group downgraded annual guidance for like-for-like underlying operating profit to GBP40 million for the year ending June 30. This is down from previously downgraded guidance for a range of GBP47 million to GBP55 million from back in April.
Kingspan plunged 10%. The building materials firm warned order volumes have slowed in recent weeks.
"We have seen the mood in most end-markets deteriorate over the last two months with order intake volume down significantly on the May and June period in 2021 although ahead versus the same period in 2019," the Kingscourt, Ireland-based firm cautioned.
Despite the recent slowdown, Kingspan expects trading profit for the first half of 2022 to be in the region of EUR415 million, up 26% from EUR329 million a year before. This is a "record" high for the company, it noted.
Gold stood at USD1,838.66 an ounce at the time of the European equities close on Monday, lower against USD1,841.66 late Friday.
Tuesday's economic calendar has the release of the latest Reserve Bank of Australia monetary policy meeting minutes overnight. The RBA earlier in June hiked interest rates.
The local corporate calendar has annual results from packaging company DS Smith and currency and derivatives manager Record.
By Eric Cunha; ericcunha@alliancenews.com
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