LONDON, June 11 ― London's main index jumped to a more than one-month high yesterday as a US-Mexico deal to avert proposed tariffs lifted global markets, while tour operator Thomas Cook surged on a potential sale of its main business to its top shareholder.
The FTSE 100 gained 0.6 per cent as investors cheered the agreement between the United States and its southern neighbour. The mid-cap FTSE 250 rose 0.3 per cent.
Gains were spread largely across the board on the blue-chip bourse, with heavyweight financial stocks, miners and oil shares all boosting the FTSE 100.
Hopes of an interest rate cut by the Federal Reserve to stimulate the economy also lingered after weak US jobs growth data on Friday.
Analysts, however, downplayed expectations of a rate cut.
“To suggest that (the US jobs data) makes a September rate cut more likely is stretching things a touch,” CMC Markets analyst Michael Hewson said. Markets.com's Neil Wilson called hopes of near-term rate cuts “overly optimistic”.
Small-cap Thomas Cook, which has put its tour operating business up for sale in the aftermath of three profit warnings in the past year, surged 17.1 per cent after it said it was in talks with Fosun Tourism, its largest shareholder.
The mid-cap index shrugged off a slide in sterling as broader market sentiment prevailed. The currency had slipped after data showed Britain's economy contracted sharply in April, with the manufacturing sector the worst hit.
“It paints an ugly picture of the UK economy, which is continuing to feel the effects of the regular shunting of the Brexit date,” Spreadex analyst Connor Campbell said.
On the FTSE 100, online grocer Ocado added 4.7 per cent after announcing a 17 million-pound investment in the newly emerging vertical farming industry.
But plumbing products distributor Ferguson lost 4.6 per cent after the company's third-quarter revenue missed analysts' expectations.
Woodford Patient Capital Trust tumbled another 6 per cent, despite reassuring investors that the suspension of a flagship equity fund had not affected its “operational performance”.
The FTSE 250-listed fund has lost nearly a quarter of its value this month. Hargreaves Lansdown, the blue-chip fund supermarket which had been a major backer of Woodford's suspended fund, gave up 1.4 per cent.
Small-cap MJ Gleeson tumbled almost 11 per cent, its worst day since June 2016, after the low-cost housebuilder said its chief executive officer would leave after “extensive” discussions regarding remuneration and succession planning. ― Reuters
