KEY POINTS
- Glencore, Rio Tinto, and Antofagasta surged as copper prices soared.
- Energy stocks gained 2.9 percent amid higher oil prices.
- GDP results could shape the Bank of England’s rate decisions.
The FTSE 100 closed higher on Monday, gaining 0.5 percent, as a rally in mining and energy stocks lifted the blue-chip index. This comes amid renewed optimism fueled by China’s announcement of a “moderately loose” monetary policy aimed at driving economic growth.
Shares of top miners like Glencore, Antofagasta, and Rio Tinto saw gains of up to 4.9 percent, making the mining sector the day’s top performer. Energy stocks followed closely behind, climbing 2.9 percent as oil prices rose by more than 1 percent, driven by China’s economic support measures.
This momentum in the FTSE 100 coincides with a dip in the midcap FTSE 250, which fell by 0.1 percent despite reaching a seven-week high earlier in the day. Analysts say market sentiment remains positive as European stocks hover near six-week highs.
China’s policy shift boosts copper prices, lifts investor confidence
Copper prices surged to their highest level in nearly a month after China, the world’s largest consumer of metals, pledged to implement a “moderately loose” monetary policy next year. The policy shift aims to stabilize the economy through a combination of fiscal and monetary support.
According to Reuters, the move sent mining giants Glencore, Rio Tinto, and Antofagasta surging, while the broader mining index also saw sharp gains. Given the strong link between copper prices and economic activity, market watchers see this as a sign of growing demand and economic recovery.
Energy stocks mirrored the trend, as oil prices climbed more than 1%, supported by higher demand expectations from China. As a major oil importer, China’s policy changes often have a ripple effect on global commodity markets.
Investors eye UK GDP data and BoE policy outlook
With a data-heavy week ahead, all eyes are on the upcoming release of Britain’s October GDP figures. Analysts believe the data could offer crucial insights into the Bank of England’s (BoE) future policy decisions.
Currently, market participants expect a 90 percent chance that the BoE will hold interest rates steady at its next policy meeting on December 19. However, there is growing anticipation of potential rate cuts in 2025, with traders pricing in about 78 basis points worth of cuts for next year.
Investor sentiment was also influenced by developments in the U.S. financial market, where key inflation data is due. Market analysts believe this data could solidify expectations for a Federal Reserve rate cut in December.
