U.K. stocks kicked off the holiday-shortened trading week slightly higher, with investors taking inspiration from Asia, where Chinese stocks surged by the most in almost three months.
The FTSE 100 index UKX, -0.20% rose 0.2% to 6,283.68, setting it on track for its highest close since late April. The benchmark posted a 1.9% gain last week — its largest weekly advance since mid-April. U.K. markets were closed on Monday for the late May bank holiday, while trading on U.S. markets was closed for the Memorial Day holiday.
Tuesday’s climb for the FTSE 100 came on the back of an upbeat session in Asia, where the Shanghai Composite Index SHCOMP, +3.34% ended 3.3% higher. The surge came on increased optimism that Chinese stocks may soon be included in the influential MSCI global benchmark.
The gains in London were also “helped along by the fact that markets appear increasingly confident that if the Federal Reserve do hike rates again next month, the U.S. economy is now looking strong enough to cope with the fallout,” said Tony Cross, market analyst at Trustnet Direct, in a note.
“This idea of rate hikes across the pond also seems to be helping lend support to at least some of the banks,” he said.
Shares of Lloyds Banking Group PLC LLOY, +0.44% LYG, -0.46% rose 0.8%, while HSBC Holdings PLC HSBA, +0.37% HSBC, +0.31% 0005, +0.79% added 0.7% and Barclays PLC BARC, +0.15% BCS, +0.74% gained 0.4%.
There was no major U.K. economic data on tap on Tuesday, but investors were waiting for Eurozone inflation numbers due at 10 a.m. London time, or 5 a.m. Eastern Time. The European Central Bank meets on Thursday and is closely watching inflation figures when determining monetary policy.