- A.G. Barr gains on upbeat outlook
- FTSE 100 up 0.9%, FTSE 250 adds 1.5%
Feb 1 (Reuters) - Mining and banking stocks lifted London's FTSE 100 on Tuesday, with upbeat outlook from A.G. Barr contributing to the positive sentiment.
The blue-chip FTSE 100 index gained 0.9%, with miners Anglo American, Rio Tinto and Glencore among the top gainers aided by stronger copper and gold prices.
The banking sub-index rose 1.2%, tracking higher yields amid expectations of interest rate increases.
Two-year yields on British bonds hit their highest since 2011 amid expectations for a 50-basis-point rate hike from the Bank of England, its second increase in a row. BOEWATCH
"Markets positioned itself for the rate hikes. Financials and materials have already benefited and have massively outperformed the rest of the markets so far this year," said Keith Temperton, sales trader at Forte Securities.
"Interest rate rises in the face of a slowdown looks like policy error about to happen, but with inflation, where it is and doing what it's doing, the central banks need to act."
The FTSE 100 has steadily outperformed its peers in the developed world due to a stronger exposure to banking stocks, which tend to thrive in a high-interest rate environment.
The domestically focused mid-cap index was up 1.5%, with travel and leisure stocks among the top gainers.
A.G. Barr gained 2% after it raised its annual profit forecast on Tuesday and said annual revenue was set to top pre-pandemic levels after it enjoyed strong sales of soft drinks like Irn-Bru.
Virgin Money UK rose 0.2%, after the British challenger bank increased its annual net interest margin outlook, as it benefits from higher-yielding lending on the back of rising interest rates.
Cineworld fell 0.6% after it said it had started talks with former shareholders of its U.S. business Regal Entertainment over a potential rescheduling of the British cinema operator's payment obligations.
Reporting by Amal S in Bengaluru; Editing by Alexander Smith and Shailesh Kuber
Source: Reuters