FTSE 100 rises on commodities gains after China ends lockdowns

The FTSE 100 was up 1.4% to 7,644.6 in late morning trading on Monday following a welcome rally in commodities shares.

The mining sector gained on easing lockdown restrictions in China, as the country’s reopening boosted demand across the industry after the celebrations of Jubilee weekend.

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“Appropriately following a platinum-themed celebration, the move higher was powered by the mining sector as investors look for a rebound in demand for metals now China is relaxing its Covid restrictions,” said AJ Bell investment director Russ Mould.

Anglo American shares climbed 3.2% to 3,976p, Antofagasta gained 2.3% to 1,530p, Croda shares increased 2.1% to 6,906p, Endeavor shares flew 4% to 1,876p, Fresnillo shares were up 2.7% to 790.3p, Glencore shares saw a boost of 2.5% to 537p and Rio Tinto shares rose 2.7% to 5,918p.

There may be danger on the horizon with the coming release of the US inflation figures later in the week, after the US markets experienced volatility following positive job numbers on Friday last week.

The update sent skittish movements across the Atlantic on apprehension the US Federal Reserve might be incentivised to speed up monetary policy tightening through additional interest rate hikes.

In Friday, the NASDAQ was down 2.4% to 12,012.7 and the S&P 500 was down 1.6% to 4,108.5 with futures pointing to a rebound on Monday.

“In the current through the looking glass environment the apparent ‘good’ news of better-than-expected US jobs numbers was taken badly by the market as it was seen as a potential catalyst for the US Federal Reserve to go harder and faster on interest rates,” said Mould.

“It showed just how nervy sentiment remains despite a recent stabilisation in the markets.”

The Hang Seng enjoyed gains of 2.7% to 21,653.9 as Asia-focused companies rose on the swell of optimism from Asian markets, with Prudential shares up 4.9% to 1,068p and Scottish Mortgage Investment Trust rising 1.4% to 807.3p.

Melrose Industries shares flew 4.4% to 139.3p in light of its $650 million sale of its Ergotron business to funds managed by the Sterling Group.

The Ergotron business was the final component of its Nortek Air Management sale to Madison Industries for £2.6 billion in April 2021.

“The sale of Ergotron is the final step in our Nortek ownership cycle, capping what has been a very successful acquisition for Melrose shareholders,” said Melrose CEO Simon Peckham.

CRH shares increased 2.4% to 3,313p after it acquired residential fencing and railing solutions company Barrette Outdoor Living for $1.9 billion.

“Barrette is an excellent addition to CRH. Our Architectural Products business has been one of our fastest growing businesses in recent years and the acquisition of Barrette complements and enhances our existing offering of sustainable outdoor living solutions in North America,” said CRH CEO Albert Manifold.

AstraZeneca shares dipped 1% to 10,325p despite the pharmaceutical group’s jointly-developed breast cancer drug Enhertu displaying an improved overall survival rate in its phase three trial and its leukaemia treatment Calquence demonstrating a sustained survival upside in another phase three trial.

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