Strong commodity stocks drive FTSE 100 higher

A strong showing by commodity stocks helped to push the London markets higher despite broadly disappointing service sector figures across Europe.

Another surge in the price of gold and a drop in US oil inventories helped to spark life into mining stocks.

Meanwhile, service PMI figures across Europe were down slightly on expectations, but the indices across the continent were boosted by more positive economic updates in the US.

The FTSE 100 closed 68.72 points higher at 6,104.72 points at the end of trading on Wednesday.

Traders on both sides of the Atlantic also remained particularly optimistic that politicians in the US will reach an agreement in relation to the coronavirus relief package.

David Madden, market analyst at CMC Markets UK, said: “The negotiations between Republicans and Democrats are still dragging on, and there isn’t much hope that things will be resolved quickly, but ultimately there is a sense that a deal will be reached in the end.

“The FTSE 100 was largely steady for the final few hours, while the Dax 30 and the Cac 40 handed back some of their earlier gains.”

Nevertheless, the major European markets still managed to finish in the green, as the German Dax increased by 0.43%, while the French Cac moved 0.75% higher.

Across the Atlantic, the Dow Jones opened higher after the US’s particularly strong service sector figures, positivity surrounding progress for Johnson & Johnson’s coronavirus vaccine and comments from President Donald Trump that it will report strong jobs data on Friday.

Meanwhile, sterling rebounded against the dollar as it took advantage of weakness in the US greenback.

The pound rose 0.54% versus the US dollar at 1.314 and was down 0.24% against the euro at 1.104.

In company news, WH Smith saw shares nudge higher after it announced plans for a major restructure, which is set to result in around 1,500 job cuts.

The high street retailer said sales at its travel arm were particularly badly hit by closures in the face of the coronavirus outbreak.

Shares in the company moved 14p higher at 999.5p at the close of play.

Elsewhere, William Hill told investors it plans to close 119 betting shops, with only 12 job losses, as customers move away from high street locations. It closed 10.45p higher at 127.6p as a result.

Insurer Hastings closed significantly higher after it agreed to a £1.7 billion takeover by a consortium involving the firm’s largest shareholder.

It saw shares rise 38p to 253p after it confirmed the offer from South Africa’s Rand Merchant International and Finnish insurer Sampo.

Cafe bar operator Loungers saw shares surge by 23.5p to 131p after it reported only a 1.7% dip in like-for-like sales over the past four weeks against the same period last year.

The price of oil jumped to its highest level since early March after the American Petroleum Institute report showed that oil inventories tumbled by 8.6 million barrels.

The price of a barrel of Brent crude oil increased by 3.24% to 45.88 US dollars.

The biggest risers on the FTSE 100 were IAG, up 18.4p at 193.8p, Evraz, up 26.7p at 321.9p, Coca-Cola HBC, up 165p at 2,198p, and Glencore, up 13.66p at 196.2p.

The biggest fallers of the day were Diageo, down 98p at 2,623p, National Grid, down 15.6p at 907.4p, Reckitt Benckiser, down 94p at 7,710p, and HSBC, down 3.25p at 333.45p.