LONDON MARKETS: FTSE 100 Locks In 2-month High, Bolstered By Mining Stocks

By Carla Mozee, MarketWatch Features Dow Jones Newswires

Retailers falls on downbeat household spending report

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Strength in mining stocks helped lift the U.K. equity market on Monday to its best close in two months.

The FTSE 100 index closed up 0.3% at 7,531.94, its strongest finish since June 2, according to FactSet data. The basic materials and the oil and gas sectors put in the best performances.The blue-chip benchmark last week rose 2%, (http://www.marketwatch.com/story/rbs-shares-propel-uk-stocks-higher-after-earnings-2017-08-04) the biggest weekly gain since December.

"Helping sentiment overnight was another Monday morning rally for iron ore prices, this time on fears of winter supply issues," said analysts at Accendo Markets in an note.

Mining shares advanced as iron ore prices climbed by roughly more than 6%, with iron ore majors BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) and Rio Tinto PLC (RIO) (RIO) (RIO) rising 2.3% and 2.6%, respectively.

Iron ore producer Anglo American PLC (AAL.LN) drove up 3.1% and commodities miner and trader Glencore PLC (GLEN.LN), whose second-quarter results are due Thursday, bulked up 2.6%.

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Mining shares make up about 89% of the basic materials sector, which in turn has an 8% weighting on the FTSE 100.

Meanwhile, shares of major oil companies advanced, with BP PLC (BP.LN) (BP.LN) up 1.1% and Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) tacking on 0.5%, bucking losses for oil prices (http://www.marketwatch.com/story/oil-prices-struggle-for-footing-ahead-of-opec-meeting-2017-08-07) . Investors will keep watch on developments from a two-day gathering of the Organization of the Petroleum Exporting Countries, which is meeting to discuss compliance with production quotas.

Retail rut: But retailers were pushed lower as financial services firm Visa (V) said household spending in the U.K. fell 0.8% in July. That was the first time since February 2013 when spending fell for three consecutive months.

"The drop in spending was felt across a broader range of retail sectors last month, with clothing, household goods, food and transport among the worst hit," said Kevin Jenkins, Visa's managing director for U.K. & Ireland, in a statement.

"The figure provides further evidence that rising prices and stagnant wage growth are squeezing consumers' pockets," said Jenkins.

Shares of apparel retailer Next PLC (NXT.LN) fell 1.4%, supermarket chain J Sainsbury PLC (SBRY.LN) gave up 1% and department store operator Marks & Spencer Group PLC (MKS.LN) shed 0.6%.

Paddy Power Betfair PLC shares slumped 4.7% after the online betting and gaming group said Chief Executive Breon Corcoran will step down after 16 years (http://www.marketwatch.com/story/paddy-power-betfair-ceo-corcoran-to-step-down-2017-08-07-24853544) with the company. No departure date has been set, but Corcoran will remain to finish integrating Paddy Power with recently purchased Betfair.

The pound on Monday bought $1.3021, down from $1.3039 late Friday in New York.

(END) Dow Jones Newswires

August 07, 2017 12:08 ET (16:08 GMT)