The FTSE 100 moved higher on Thursday after Boris Johnson finally threw in towel on his time as Prime Minister.
Stocks in London rose in line with global equities as investors continued to pick up bargains after a period of heavy selling.
Miners stormed ahead with Antofagasta rising over 8% at the time of writing, while Anglo American and Glencore added over 6%.
Shell and BP added a significant number of points to the FTSE 100 as they gained 3% and 4% respectively.
“This continued the recovery from a big sell-off at the start of the week and followed mixed trading in Asia. Resources stocks were in heavy demand with Shell releasing a teaser ahead of its second quarter results, which revealed just how well it has done out of the recent strength in energy prices,” said AJ Bell investment director Russ Mould.
However analysts pointed to potential risks to commodities companies given the backdrop of slowing growth and possibility of a recession.
“The big risk for Shell and BP going forward is that slowing economies could pull down the price of oil but for now there is an expectation that demand will keep outstripping supply,’’ said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.
Persimmon was one of the FTSE 100’s top fallers after the builder signalled it was starting to feel the impact of supply chain issues. The housebuilder fell over 5% as it also said planning application hold-ups were hindering its activity.
“Persimmon could be the canary in the coal mine for housebuilders, one of the last sectors holding on to post-pandemic euphoria. The group said that supply chain snarls were starting to eat into revenues as materials and labour shortages kept the group from delivering as many new homes as it expected,” said Laura Hoy, Equity Analyst at Hargreaves Lansdown.
“Planning holdups thanks to the pandemic were another issue as backlogs have kept some 1,500 sites due to open over the next 5 years in limbo. This is a Persimmon-specific problem given the group prefers to buy land without planning at a lower cost to boost profits.”