London stocks rebound on metal miner rally ahead of UK election

By Purvi Agarwal and Roshan Abraham

(Reuters) -British stocks closed higher on Wednesday, boosted by metal miners ahead of the UK parliamentary election on Thursday that the Labour Party looks poised to win.

The blue-chip FTSE 100 gained 0.6% and saw the best day in nearly two weeks after closing at a more than two-month low in the previous session.

The mid-cap FTSE 250 jumped 1.7% in its best day this year, snapping a three-session losing streak.

The market’s attention is riveted on the UK vote, where opinion polls indicate it’s almost a sure bet the Labour party will seize power, ending 14 years of Conservative government.

“Market mood is fairly positive heading into the election as Labour is pretty close to securing their large depth of majority … we have historically seen a fairly decent run up on the back of a new government,” said Christopher Peters, trading floor manager at Accendo Markets.

“There’s reasons for investors to cheer as long as we get some certainty on Friday, which looks increasingly likely.”

However, the full reaction to the election’s outcome will likely be seen only on Friday, Peters said.

Uncertainty over the UK vote has been among the reasons the FTSE 100 has eased about 3.5% from its record high in May.

Precious metal and industrial metal miners were among the top gainers, rising 4.0% and 2.4% respectively, tracking higher gold and copper prices. [GOL/][MET/L]

Also on the radar, is non-farm payrolls data in the U.S. due on Friday, which will provide more clues on the Fed’s monetary policy path. Employment data on Wednesday raised hopes for a September start to U.S. monetary policy easing.

Among individual stocks, British Airways owner IAG gained 5.5% after the EU antitrust regulator approved Lufthansa’s purchase of 41% of Italy’s ITA Airways, boosting rival IAG’s hopes for its takeover of Air Europa.

JD Sports slumped 4% to hit the bottom of the FTSE 100 index, after Barclays downgraded the retailer to “underweight” from “equal-weight”.

(Reporting by Purvi Agarwal, Pranav Kashyap and Roshan Abraham in Bengaluru; Editing by Bernadette Baum)


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