The FTSE 100 was higher on Monday as mining companies helped lift the index after BHP called time on its pursuit of Anglo American.
Traders will also find confidence in a strong rebound in US stocks on Friday, which will ease concerns about AI valuations and the outlook for interest rates.
London’s leading index was 10 points higher at the time of writing as traders eyed this week’s Budget and potential implications for UK markets.
“Equities up, gold down, bitcoin stable – this is a remarkably different picture than last week’s troubling scenes that dogged financial markets,” says Russ Mould, investment director at AJ Bell.
“It suggests investors have had time to collect their thoughts over the weekend, and to start the new week in a calmer mood. It also helps that Ukraine peace talks have dominated the news agenda, giving hope to investors and individuals around the world.”
The FTSE 100 had been higher earlier in the session, but the rally faded as the session progressed. Investors will look to US markets for the next catalyst as cash trading gets underway this afternoon.
The mining sector was the key driving force behind the gains after BHP pulled out of its pursuit of Anglo American, saying ‘it is no longer considering a combination of the two companies.’
BHP’s decision boosted the miners as investors positioned for possible M&A elsewhere in the sector.
“Miners were in vogue amid ongoing M&A activity in the sector. News that BHP has walked away from a second attempt to buy Anglo American has left investors hungry for action elsewhere,” Russ Mould said.
“Glencore was among the top risers on the FTSE as it is seen as a potential merger candidate for one of the big players, or as a buyer itself.”
Glencore rose 1.9% but it was the precious metals miners that had their noses out in front. Endeavour Mining was the top riser with a 3.7% gain, while Fresnillo rose 3.1%.
BAE Systems and Babcock were the biggest decliners, with talks to end the war in Ukraine underway. BAE Systems lost 2% and Babcock fell 1.9%.
There was a tinge of weakness in UK-centric sectors such as retailers and some financials ahead of Wednesday’s Budget.