Miners lead FTSE 100 higher, homebuilder Bellway soothes demand concerns

London’s FTSE 100 rose on Tuesday as strong commodity prices sparked a rise in miners, while an upbeat outlook from homebuilder Bellway (LON:BWY) lifted the mid-cap FTSE 250 index.

Miners Rio Tinto (LON:RIO), Glencore (LON:GLEN) and Anglo American (LON:AAL) rose about 2.5% each, as London aluminium prices hit a near four-month high on Tuesday on dwindling inventories. [MET/L]

The FTSE 100 index rose 0.5%, with basic materials stocks rising 1.5% in the first hour of trading.

The FTSE 100 index has outperformed the pan-European STOXX 600 index so far this year, with help from more value-oriented sectors including miners, energy stocks and banking firms.

Investors are moving towards parts of the market that are expected to perform better, as central banks across the developed countries gradually start reining in pandemic-era stimulus and hiking interest rates.

Rising price pressures led the Bank of England to raise interest rates to 0.5% last week, while nearly half its policymakers wanted a bigger increase to contain rampant price pressures.

BP (LON:BP) rose 0.8% after reporting its highest profit in eight years in 2021 as natural gas and oil prices soared.

“BP’s share price has been amongst the best performers year to date on the FTSE100, which is welcome news for shareholders who have had to ride out a turbulent couple of years,” said Michael Hewson, chief market analyst at CMC Markets UK.

The mid-cap index added 0.3%, boosted by Bellway Plc, which jumped 3.9% as it echoed its bigger rivals in saying it expected strong demand in the housing market to persist.

Leading sectoral gains were basic materials and energy stocks.

British renewable power generator and network operator SSE (LON:SSE) Plc rose 1.3% after upgrading its outlook for full-year 2021/22 adjusted earnings.