London stock indexes close higher on miners, industrials boost
By Shristi Achar A and Shashwat Chauhan
(Reuters) -UK’s main stock indexes closed higher on Wednesday led by miners and industrials after a better-than-expected reading on business activity in November and as the country’s top court ruled against a Scottish referendum vote.
The blue-chip FTSE 100 rose 0.2% up, while the domestically-focused FTSE 250 midcap index added 0.4%.
Miners climbed 1.5%, extending Tuesday’s recovery.
The UK Supreme Court ruled the Scottish government cannot hold a referendum on independence without approval from the British parliament, dealing a hammer blow to nationalists’ hopes of holding a vote next year.
“The outcome of the UK court ruling removes the potential risk around the crown and the economy and relieves some of the pressure from the UK assets, including the pound and UK stocks,” said Daniela Hathorn, senior market analyst at Capital.com.
“We have got that feeling of ‘pause’ to see what’s going to happen next… in terms of central banks.”
The “flash” version of the HIS Markit/CIPS composite purchasing managers’ index (PMI) for Britain edged up to 48.3, while economists polled by Reuters had expected the flash PMI to fall again this month to 47.5.
However, the numbers showed British economic activity fell at close to its fastest pace in nearly two years in November, adding to signs of recession.
Despite concerns about a potential recession, UK markets have recovered sharply from a selloff in October on hopes the new government leadership will reinstill confidence in the country’s fiscal health and that the U.S. Federal Reserve will slow its pace of interest rate hikes.
Global stocks were steady ahead of the Fed’s November meeting minutes due to be released later in the day.
Meanwhile, the Bank of England will press on with interest rate rises to battle inflation, with economists pricing in a 78% chance of a 50-basis point hike in December, according to a Reuters poll of economists.
Among individual stocks, Glencore gained 3% after blank-check firm Metals Acquisition Corp agreed to an amended agreement to buy the global miner’s Cobar copper mine in Australia.
British industrial group Rotork Plc added 4.4% on higher four-month revenue.
Pets at Home Group fell 5.1% as the company said that Britons were buying fewer toys and other items for their dogs amid a cost-of-living squeeze.
(Reporting by Shashwat Chauhan and Shristi Achar A in Bengaluru; Editing by Dhanya Ann Thoppil, Shounak Dasgupta and Josie Kao)