London markets jump as China eases Covid restrictions

UK firms saw shares lift higher on Monday as European trading was boosted by the withdrawal of some Covid-19 curbs in Asia.

Stocks also performed well amid cautious trading on the pound ahead of the Prime Minister’s confidence vote on Monday evening.

The FTSE 100 ended the day up 75.27 points, or 1%, at 7,608.22 points

The pound decreased by 0.12% against the dollar to 1.254, but increased 0.02% against the euro to 1.171.

Michael Hewson, chief market analyst at CMC Markets UK, said: “European markets have got off to a solid start to the week after a positive lead from Asia markets which were boosted by the continued relaxation of restrictions in Chinese cities, which for over two months have acted as a brake on sentiment.

“This optimism has played out in the form of outperformance in basic resources, while oil prices have also edged higher after Saudi Arabia raised prices to Asia markets, having announced it would be raising output by around 648,000 barrels a day from July.

“BP and Shell helped to support the FTSE 100, which retested the highs from last week, but was unable to break above them.”

Rising commodity and metal prices also led to a strong session for the likes of Rio Tinto, Anglo American and Glencore.

Elsewhere in Europe, the other main markets were also buoyant although pharmaceuticals had a weaker showing.

The German Dax increased by 1.34% by the end of the session while the French Cac rose 0.98%.

On Wall Street, the US markets took their cues from Europe and Asia to climb and offset a drop at the end of last week.

In company news, shares in mattress retailer Eve Sleep plummeted after it warned the business will miss revenue targets for the year amid difficult consumer conditions.

Bosses at the group also told shareholders that they are hunting for a new owner to take the company private.

As a result, the company finished the day 0.35p lower at 1.3p.

Wizz Air slipped after it was among airliners to cancel flights over the Jubilee bank holiday amid widespread staffing issues.

It came as the company reported higher passenger numbers for May than it carried before the pandemic, although it still remained below levels from May 2019.

Wizz was 76p lower at 2,778p at the close of play.

Meanwhile, Melrose Industries gained ground after confirming the 650 million US dollar (£520 million) sale of its Ergotron business to a US private equity firm.

Shares increased by 4.4p to 137.8p after Melrose sold the final part of the Nortek business it snapped up in 2016 to The Sterling Group, having sold Nortek Air Management and Nortek Control last year.

The price of oil nudged only marginally lower after a significant slump last week.

Brent crude decreased by 0.08% to 119.62 US dollars per barrel when the London markets closed.

The biggest risers in the FTSE 100 were Rolls-Royce, up 4.19p at 92.92p, Ocado, up 42.8p at 951.4p, Prudential, up 45.5p at 1,063.5p, Coca-Cola HBC, up 72.5p at 1,775.5p, and Endeavour, up 71p at 1,875p.

The biggest fallers of the day were AstraZeneca, down 370p at 10,072p, Entain, down 23p at 1,437p, Dechra, down 54p at 3,514p, BT Group, down 2.7p at 184.9p, and Bunzl, down 32p at 2,779p.