London stocks gain on mining, energy boost

British equities gained on Friday as mining stocks rose after weak data from China raised bets of more stimulus from Beijing, while energy companies tracked oil prices higher.

The blue-chip FTSE 100 rose 0.4%, while the more domestically-focussed FTSE 250 midcap index added 0.4%, both indexes set to close the week with gains.

The FTSE 100 is on track to end the month higher, but was set to snap two successive quarters of gains as surging domestic inflation and a rising global interest rate environment took the wind out of equities.

Industrial metal miners gained 0.4% as copper prices rose on stimulus hopes after data showed China’s factory activity declined for a third straight month in June. [MET/L]

Heavyweight energy stocks gained 1% after Brent crude futures for September delivery rose or 0.1% to stand at $74.54 as of 0631 GMT[O/R]

Mortgage lender Nationwide said British house prices fell by the most since 2009 in the 12 months to June, although monthly data showed a small unexpected rise.

“Given sticky inflation and raising interest rates, that (monthly) read was probably a bit of a surprise,” said Christopher Peters, trading floor manager at Accendo Markets.

Housing-related stocks such as real estate, real estate investment trusts and homebuilders gained between 0.5% and 0.7%.

Barratt Developments (LON:BDEV) rose 0.5% after Britain’s largest housebuilder said it had agreed to a sale of 604 homes to Citra Living Properties for a cash consideration of 168.4 million pounds ($212.57 million).

Petrofac (LON:PFC) jumped 7.5% after the oilfield services firm said Abu Dhabi National Oil Company (ADNOC) had awarded the company a $700 million contract.

Meanwhile, final estimates from the Office for National Statistics (ONS) showed Britain’s economy grew 0.1% in the first quarter of this year, unrevised from an initial estimate.

Overnight, BoE rate-setter Silvana Tenreyro said that the bank has no need to raise interest rates further to curb inflation, and risks having to make a sharp U-turn if it tightens policy any more.