* HSBC biggest boost to the FTSE 100
* FTSE 100 about 17% below January record high
* Defence contractor Chemring soars after winning U.S.
orders
(Adds details, updates to close)
By Ambar Warrick
June 3 (Reuters) - UK shares closed at three-month highs on
Wednesday as better-than-expected data from the world's two
largest economies pointed to an ongoing economic recovery from
the coronavirus.
The blue-chip FTSE 100 and the mid-cap FTSE 250
both added about 2.6% as readings showed business
activity in the United States and China beginning to recover
from the worst readings of the COVID-19 pandemic.
The data fed optimism over the UK economy grinding back into
gear, as the government scales back virus-related lockdown
measures.
"The economy's slowly coming back into production. It seems
like we may have a much quicker recovery than what was
anticipated before," said Michael Baker, analyst at ETX Capital.
"We're breaking key levels, and we're still a little bit
further and farther off from where we were, pre-pandemic.
There's aggressive buying on the high."
UK stock markets have rebounded sharply from March's
coronavirus-driven crash, with optimism about easing
stay-at-home orders and more global stimulus offsetting concerns
about U.S.-China tensions and growing civil unrest in the United
States.
The FTSE 100 is now about 17% below its January record high,
with battered autos, real estate and
travel stocks driving the rebound since April.
HSBC was the biggest boost to the blue chip index
on Wednesday, rising more than 4% after the bank's top executive
signed a petition backing China’s imposition of a national
security law on Hong Kong.
Oil and gas heavyweights Royal Dutch Shell and BP
rose as hopes for recovering demand and likely OPEC
production cuts boosted crude prices.
TUI Group, Europe's biggest travel company, jumped
8.5% on a deal struck with U.S.-based Boeing for
compensation and slower delivery of the 737 MAX aircraft.
Defence contractor Chemring Group soared 26%, its
best day in nearly eight years, as it maintained its annual
targets and raised dividends after winning new orders from the
United States despite the coronavirus crisis.
(Reporting by Sagarika Jaisinghani and Shashank Nayar in
Bengaluru; Editing by Arun Koyyur; Editing by Kirsten Donovan)
