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Miners, energy stocks push FTSE 100 higher

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UK’s FTSE 100 edged higher on Monday, buoyed by energy firms and miners, though concerns about slowing economic growth kept investors on edge after major central banks stuck to their hawkish monetary policy stance last week.

The export-oriented FTSE 100 climbed 0.5%, while the domestically focussed FTSE 250 was flat.

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Energy firms and miners added 2.9% and 0.7%, respectively, tracking upbeat oil and copper prices higher as loosening COVID curbs in top-consumer China aided demand recovery hopes.

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“It’s a relief that with Christmas approaching, the worst of the bad news is over for now and that we are not going to get any more bad vibes from central banks,” said Stuart Cole, head macro economist at Equiti Capital.

As UK markets enter into the final weeks of the year, the automobiles and parts sector is set to be the biggest loser on the index, down 58% so far.

“The sector can be indicative of consumer sentiment because it highlights the fact that consumers are having a hard time with the cost-of-living at the moment,” Cole said on a call, pointing out that sales of big ticket items such as cars could come under pressure.

The previous week saw the Bank of England raising rates as expected, but markets were ruffled by the central bank’s comments that rates could go higher going forward. Consequently, the FTSE 100 posted its biggest weekly loss in over two months on Friday.

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A majority of traders are now expecting the central bank to raise rates by 25 basis points on Feb. 2.

Among the stocks, investors of Capricorn Energy opposed a planned merger with NewMed Energy, arguing that the deal undervalues Capricorn, as per a Reuters exclusive report. Still, the stock rose 1% lifted by an upbeat energy sector.

Defying broader market moves, pharmaceutical firms dropped 0.4%, bogged down by AstraZeneca’s 0.4% fall after its lung cancer drug failed in a late-stage trial.

Other sectors that fell on Monday included rate-sensitive real estate and retailers, which lost between 0.7% and 0.9%, respectively. (Reporting by Johann M Cherian in Bengaluru; Editing by Savio D’Souza an Dhanya Ann Thoppil)

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