LONDON: Strength in mining stocks helped lift the U.K. equity market on Monday to its best close in two months. The FTSE 100 index UKX, +0.27% closed up 0.3% at 7,531.94, its strongest finish since June 2, according to FactSet data. The basic materials and the oil and gas sectors put in the best performances.The blue-chip benchmark last week rose 2%, the biggest weekly gain since December. “Helping sentiment overnight was another Monday morning rally for iron ore prices, this time on fears of winter supply issues,” said analysts at Accendo Markets in an note. Mining shares advanced as iron ore prices climbed by roughly more than 6%, with iron ore majors BHP Billiton PLC BLT, +2.27% BHP, +1.89% BHP, -0.11% and Rio Tinto PLC RIO, +2.57% RIO, +2.18% RIO, +0.17% rising 2.3% and 2.6%, respectively. Iron ore producer Anglo American PLC AAL, +3.11% drove up 3.1% and commodities miner and trader Glencore PLC GLEN, +2.59% whose second-quarter results are due Thursday, bulked up 2.6%. Mining shares make up about 89% of the basic materials sector, which in turn has an 8% weighting on the FTSE 100.
Meanwhile, shares of major oil companies advanced, with BP PLC BP., +1.11% BP, +1.16% up 1.1% and Royal Dutch Shell PLC RDSB, +0.52% RDS.B, +0.05% tacking on 0.5%, bucking losses for oil prices CLU7, -0.36% LCOV7, -0.42% Investors will keep watch on developments from a two-day gathering of the Organization of the Petroleum Exporting Countries, which is meeting to discuss compliance with production quotas. Retail rut: But retailers were pushed lower as financial services firm Visa V, +0.59% said household spending in the U.K. fell 0.8% in July. That was the first time since February 2013 when spending fell for three consecutive months. “The drop in spending was felt across a broader range of retail sectors last month, with clothing, household goods, food and transport among the worst hit,” said Kevin Jenkins, Visa’s managing director for U.K. & Ireland, in a statement. “The figure provides further evidence that rising prices and stagnant wage growth are squeezing consumers’ pockets,” said Jenkins.
Shares of apparel retailer Next PLC NXT, -1.41% fell 1.4%, supermarket chain J Sainsbury PLC SBRY, -0.99% gave up 1% and department store operator Marks & Spencer Group PLC MKS, -0.64% shed 0.6%. Paddy Power Betfair PLC shares PPB, -4.67% slumped 4.7% after the online betting and gaming group said Chief Executive Breon Corcoran will step down after 16 years with the company. No departure date has been set, but Corcoran will remain to finish integrating Paddy Power with recently purchased Betfair.The pound GBPUSD, +0.1074% on Monday bought $1.3021, down from $1.3039 late Friday in New York.