The UK’s FTSE 100 rose on Monday, extending gains for a seventh straight session, with miners and oil heavyweights boosting the resource-rich index, while shares of Network International surged on a buyout offer.
The FTSE 100, the benchmark index of the UK’s leading shares, continued its upward trend for a seventh consecutive session on Monday. The index closed at 7,129.71, up 0.2% from the previous session, boosted by strong performances from mining and oil companies.
Mining giants BHP Group and Rio Tinto were among the biggest gainers, rising 2.4% and 2.2% respectively, as prices of iron ore, copper and other metals rose on the back of strong demand from China. Oil majors BP and Royal Dutch Shell also contributed to the gains, with BP rising 1.5% and Shell gaining 1.1%.
The surge in commodity prices was driven by the reopening of economies around the world and a rebound in global trade, which have boosted demand for raw materials. This has provided a tailwind to the FTSE 100, which has a large exposure to commodities and energy stocks.
In addition to the resource sector, shares of Network International, a payment processing company, surged by more than 16% after it received a buyout offer from a private equity consortium led by Warburg Pincus. The consortium has offered to buy the company for 450 pence per share, valuing it at around £2.2bn.
The offer represents a premium of 16% over Network International’s last closing price and has been recommended by the company’s board. The deal is subject to approval by shareholders and regulatory authorities.
The buyout offer for Network International comes amid a flurry of deal-making activity in the UK, as low interest rates and a rebound in equity markets have spurred companies to pursue mergers and acquisitions. Last week, cybersecurity firm Darktrace announced plans to go public in London, while Morrisons, the UK’s fourth-largest supermarket chain, received a takeover offer from a US private equity firm.
The FTSE 100’s recent performance has been a welcome relief for investors, after a volatile year that saw the index tumble to its lowest level in a decade in March 2020, amid the onset of the Covid-19 pandemic. However, the index has since rebounded strongly, driven by a combination of government stimulus measures, low interest rates and a global economic recovery.
Looking ahead, analysts are cautiously optimistic about the prospects for the FTSE 100, with many predicting further gains as the global economy continues to recover. However, they warn that the index remains vulnerable to setbacks, such as a resurgence in Covid-19 cases or a sharp rise in inflation. As always, investors will need to remain vigilant and monitor developments closely.
The blue-chip FTSE 100 (.FTSE) rose 0.5%, while the mid-cap FTSE 250 (.FTMC) added 0.6%, as of 0712 GMT.
Energy stocks (.FTNMX601010) added 1.2% as crude prices rose on OPEC+’s plans to cut more output and as markets eyed Chinese economic data for signs of demand recovery.
Adding to gains, metal miners (.FTNMX551020) rose 1.8% as tin prices jumped to their highest in nearly two months amid talks of a potential ban on mining in major ore producer Myanmar.
Among individual stocks, Network International (NETW.L) soared 21.3% after the payments provider received a takeover proposal from a consortium of CVC Capital and Francisco Partners.
John Wood Group (WG.L) added 7.2% after the company decided to engage with Apollo Management for a firm offer for a final buyout price of 240 pence per share.