London’s FTSE 100 hit a one-week high on Tuesday, getting a boost from financial and mining stocks as investors bet on more stimulus measures to soften the economic impact from a new wave of coronavirus infections.
The commodity-heavy FTSE 100 index gained 1.4%, bolstered by banks, energy and mining stocks.
The domestically-focussed mid-cap FTSE 250 rose 1.3%, with shares in Crest Nicholson Holdings Plc surging 18.9% after the homebuilder forecast annual profit ahead of market expectations and reinstated dividend.
The wider homebuilding sub-index gained 1.3%.
“It’s quite surprising when you’ve got such a massive event driven week, you can see a little bit of apprehension at the start of the week, but it has been quite the opposite,” said Craig Erlam, senior market analyst at Oanda in London.
“We’re heading into an extremely uncertain period and if we could see the smooth U.S. presidential election, a vaccine announcement in over the coming weeks and a Brexit deal, which looks highly likely now in the next couple of weeks, all of these are very supportive factors for markets.”
UK shares have logged a strong start to November after ending October with their biggest monthly decline since the coronavirus-fuelled crash in March, with traders counting on more monetary and fiscal measures to support businesses impacted by a new round of nationwide lockdowns.
In its policy meeting on Nov. 5, the Bank of England is expected to ramp up its bond-buying programme.
Focus this week is also on the U.S. presidential election, with Democratic contender Joe Biden leading over Republican President Donald Trump in national opinion polls, but the race looked close in key battleground states.
G4S Plc rose 3.9% after the private security firm rejected a takeover proposal from U.S. rival Allied Universal Security Services. But Associated British Foods Plc fell 1.5% after the Primark owner reported a 40% fall in its annual earnings.
(Reporting by Devik Jain in Bengaluru; Editing by Bernard Orr and Rashmi Aich)