London close: FTSE higher as PM fashions DUP deal from election flotsam
London shares closed higher after PM Theresa May crafted a confidence and supply deal with Northern Ireland's DUP from the flotsam and jetsam of her general election humiliation.
The Tories found their pre-election majority in parliament was slashed to a minority.
"The agreement we have come to (with the DUP) is a very, very good one, and look forward to working with you," said May, who also repeatedly promised strong and stable leadership prior to the election.
Today's outcome followed two weeks' wrangling. DUP's 10 MPs would back the Tories in key Commons votes in return for more than £1bn in extra funding for Northern Ireland.
At the end of Monday trade, FTSE 100 was up 0.31% to 7,446.80, and the FTSE 250 was barely changed - off by just 0.47 points to 19,684.62. Sterling was gaining mildly on the dollar. Elsewhere, Wall St was mixed early in its session, while Europe was firmer across the board.
"Stock price ticker boards were filled with green on Monday. Bank stocks led the gains after the state rescue of two lenders in Italy," said Jasper Lawler of London Capital Group.
Chris Beauchamp, chief market analyst at IG, said some of the day's shine was taken off due to an afternoon wobble, noting the Italy bank bailout and rise in German business confidence.
"Even the UK government appeared to get its act together," he opined.
Connor Campbell, financial analyst at Spreadex, said Eurozone indices were cheered by the Banco Popolare di Vicenza/Veneto Banca rescue plan this Monday.
"The DAX, which also benefited from an all-time high German Ifo business climate reading, re-crossed 12800 with a 0.7% rise, while the CAC climbed by 1%."
On the data front, the latest figures from the British Bankers' Association showed 40,347 mortgages were approved in May, which was pretty much in line with expectations for 40,300 mortgages to be approved.
Looking more closely at the blue-chip movers and shakers, banks got a boost as the Italian government was forced to bail out two banks in the Venice region at a cost of £4.6bn.
RBS, HSBC, Standard Chartered and Barclays were all in the black. Insurance heavyweights Legal & General, Prudential and Standard Life were all doing well.
Utilities were doing comfortably, as were several commercial property companies. Gold specialists such as Fresnillo and Randgold Resources fell with the yellow metal.
Provident Financial was on the back foot after RBC Capital Markets cut its stance on the subprime lender to 'sector perform' from 'outperform' and slashed the price target to 2,650p from 3,400p following a warning over its consumer credit division last week.
Mediclinic was also in the red as Investec downgraded it to 'hold' from 'buy'. "Our analysis gives us comfort that the new FY18 guidance is achievable, and we adopt a more positive stance than guidance in the UAE."
Hikma Pharmaceuticals reversed course to trade a little lower as it announced the retirement of Michael Raya, the chief executive officer of the US business, which it said it was splitting into two units - a generics division and an injectables division.
Market Movers
FTSE 100 (UKX) 7,446.80 0.31%
FTSE 250 (MCX) 19,684.62 -0.00%
techMARK (TASX) 3,624.81 -0.13%
FTSE 100 - Risers
Whitbread (WTB) 4,045.00p 2.17%
International Consolidated Airlines Group SA (CDI) (IAG) 611.00p 2.09%
Royal Bank of Scotland Group (RBS) 249.80p 1.71%
TUI AG Reg Shs (DI) (TUI) 1,150.00p 1.50%
easyJet (EZJ) 1,356.00p 1.42%
Reckitt Benckiser Group (RB.) 7,960.00p 1.32%
HSBC Holdings (HSBA) 688.90p 1.20%
Barclays (BARC) 199.90p 1.19%
Unilever (ULVR) 4,332.50p 1.10%
Prudential (PRU) 1,816.00p 1.06%
FTSE 100 - Fallers
Fresnillo (FRES) 1,555.00p -3.12%
Antofagasta (ANTO) 751.00p -2.72%
Provident Financial (PFG) 2,399.00p -1.68%
Randgold Resources Ltd. (RRS) 7,000.00p -1.62%
Rolls-Royce Holdings (RR.) 930.50p -1.22%
Next (NXT) 4,000.00p -1.16%
Wolseley (WOS) 4,811.00p -1.11%
Mondi (MNDI) 2,039.00p -0.92%
G4S (GFS) 329.60p -0.90%
Pearson (PSON) 704.00p -0.85%
FTSE 250 - Risers
Nostrum Oil & Gas (NOG) 472.40p 3.40%
Cineworld Group (CINE) 704.50p 3.30%
Vectura Group (VEC) 117.70p 2.79%
Evraz (EVR) 194.60p 2.58%
Domino's Pizza Group (DOM) 289.80p 2.55%
Barr (A.G.) (BAG) 647.00p 2.45%
Ultra Electronics Holdings (ULE) 2,080.00p 2.41%
Drax Group (DRX) 346.10p 2.34%
Tullow Oil (TLW) 148.60p 2.06%
Capita (CPI) 705.50p 2.02%
FTSE 250 - Fallers
William Hill (WMH) 262.40p -4.41%
Centamin (DI) (CEY) 160.00p -3.03%
Polymetal International (POLY) 897.00p -2.71%
Melrose Industries (MRO) 252.50p -2.43%
Aveva Group (AVV) 2,038.00p -2.35%
Great Portland Estates (GPOR) 608.00p -2.33%
Kaz Minerals (KAZ) 470.80p -2.32%
Sirius Minerals (SXX) 32.40p -2.32%
Playtech (PTEC) 993.50p -2.21%
Softcat (SCT) 395.70p -2.15%