London-listed shares jumped on Wednesday as record gold prices powered miners of the commodity, while insurer Hastings Group soared after agreeing to a $2.2 billion buyout offer.
A 17.8% surge for the motor insurer (HSTG.L) drove the FTSE 250 .FTMC up 1%. Almost all the mid-cap sub-indexes were trading higher, led by industrials, consumer discretionary and materials stocks.
The export-laden FTSE 100 .FTSE also gained 1%, with investors watching signs of progress in a U.S. fiscal relief bill. White House negotiators have vowed to work “around the clock” to reach a spending deal by the end of the week.
“There is optimism that we’ll get some form of stimulus bill and we’ll continue to range trade in Europe (since) at the moment it is difficult to take any sort of view to how the economy is going to look in the next six months,” said Michael Hewson, market analyst at CMC Markets UK.
Miners Centamin Plc (CEY.L) and Hochschild Mining Plc (HOCM.L) jumped 5.8% and 7.3%, respectively, as gold prices topped $2,000 an ounce due to a coronavirus-driven economic slump.
Historic global stimulus has helped UK stock markets roar back from a pandemic-fuelled crash in March, but the indexes have recently struggled to climb higher as economic data points to a deep recession and surging COVID-19 cases threaten further lockdowns.
The Bank of England is due to announce its next policy decision at 0600 GMT on Thursday, with focus on how fast it expects the domestic economy to rebound. Some early macroeconomic figures have signalled a pickup in the housing and auto industries with the easing of business restrictions.
Soft drinks bottler Coca Cola HBC (CCH.L) rose 4.2% as it said business had recovered from April lows, while bookmaker William Hill (WMH.L) gained 3.7% on reporting a better-than-expected first-half profit.
Life insurer Legal & General (LGEN.L) fell 2.3% on posting a drop in first-half operating profit.
