UK mining companies gains in FTSE as gold prices ascend

Britain's blue-chip share index was higher on Monday as a weaker U.S. dollar boosted commodities companies while positive results boosted NMC Health.

The FTSE 100 was up 0.5 per cent by 0938 GMT as the pound eased by 0.2 per cent. European shares were boosted by gains in Italian banks after Moody's kept the country's sovereign rating stable, easing worries over a sell-off in the country's government bonds.

UK mining companies were among the biggest gainers as gold prices edged towards a 2-1/2 month peak and copper rose 1 per cent as the dollar eased along with improved sentiment over political tensions and global economic growth.

IG market analyst Joshua Mahony, however, said that the rise could be short-lived as the U.S.-China relationship comes under renewed pressure after U.S. Secretary of State Mike Pompeo's warning against investing in China.

Fresnillo was the second-biggest gainer, up 4 per cent after touching its highest since late August. Glencore was up 2 per cent and Antofagasta gained 2.2 per cent.

Copper and platinum "have been showing signs of recovering recently, and should that be the case, we could see further upside for mining companies", David Madden, market analyst at CMC Markets UK, said in a note.

Financials provided the biggest lift to the overall market, with Lloyds Banking Group jumping 2.7 per cent after the Financial Times reported that the bank is planning to double its share buyback programme to almost £2 billion next year.

The move was seen as a sign of the lender's confidence even as the economic outlook remains uncertain.

Positive earnings helped to lift NMC Health. The United Arab Emirates-based healthcare provider raised its full-year earnings and revenue forecasts, citing strong organic growth, and said it remained confident of achieving its longer-term margin guidance.

Outside of the blue-chips, broker moves and M&A activity were in focus on the mid-cap FTSE 250, which firmed by 0.2 per cent.

B&M European Value Retail SA was the biggest gainer, up 5.7 per cent on news of plans to buy France's Babou Stores Group.

Among the losers, Cairn Energy fell 2.6 per cent after Jefferies downgraded the stock to "underperform" and cut its target price, while Provident Financial dropped 2.5 per cent as Barclays cut its price target after the sub-prime lender's trading update on Friday.

(With inputs from agencies.)