The FTSE 100 rose on Monday as falling oil prices and easing US Treasury yields supported UK shares ahead of the government’s Budget and the US Federal Reserve’s interest rate decision.
The FTSE 100 gained 0.4% to 10,736.81 points by 11:18 GMT, while the FTSE 250 rose 1%, putting the mid-cap index on course for its strongest daily gain since 9 October.
Oil prices fell by more than 1% as hopes of easing tensions between the United States and Iran supported market sentiment. However, Brent crude remained above $114 a barrel, keeping energy costs and geopolitical risks in focus.
The decline in oil prices weighed on energy shares. Shell and BP fell 1.7% and 2% respectively, while the wider energy sector lost 1.8%. Banks gained 1.4%, and aerospace and defence stocks rose 2.5%. Rolls-Royce advanced 2.3% following Friday’s decline.
Computacenter was among the strongest performers, rising around 10% after raising its full-year adjusted pre-tax profit guidance. The technology services provider said its trading performance had improved, providing support for the wider technology sector.
3i Group also gained 2.8% after its portfolio company Future Biogas agreed to acquire the remaining 49% stake in six UK anaerobic digestion plants for £104 million.
Attention is turning to the UK Budget on Wednesday, which will be the first under Finance Minister John Healey. Investors will be looking for clarity on taxation, government spending and borrowing, with the measures expected to influence gilt yields, sterling and sectors sensitive to changes in fiscal policy.
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