FTSE 100 edges higher as NatWest, StanChart shares rise

UK's blue-chip index edged higher on Monday, with NatWest shares rising after it agreed to buy 1.3 billion pounds ($1.6 billion) worth of its shares back from the government, although lingering uncertainty over the U.S. debt ceiling impasse weighed on overall mood. The FTSE 100 rose 0.3%, with bank stocks in the lead.

UK's blue-chip index edged higher on Monday, with NatWest shares rising after it agreed to buy 1.3 billion pounds ($1.6 billion) worth of its shares back from the government, although lingering uncertainty over the U.S. debt ceiling impasse weighed on overall mood.

The FTSE 100 rose 0.3%, with bank stocks in the lead. British state-backed NatWest Group Plc edged up 0.8% after it agreed to buy back some shares from the government, edging closer towards private ownership 15 years after it was bailed out in the global financial crisis.

"It doesn't fundamentally change much about NatWest but is a symbolic one. Removing government stabilisers is a clear marker of the bank entering a new chapter," said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown. Standard Chartered rose 2.4% after Bank of America upgraded the stock to "buy" from "neutral". The banking sector added 0.7%.

UK-listed stocks have traded in tight bands since late April as investors digested mixed corporate earnings, weakening outlook for commodity-linked stocks and standoff over the U.S. debt ceiling deal. Meanwhile, British inflation data due on Wednesday could help determine if the Bank of England will continue to raise interest rates further.

The mid-cap FTSE 250 was flat, weighed down by a 7.0% decline in Dechra Pharmaceuticals PLC after the veterinary healthcare firm cut expectations for its annual underlying operating profit. Kainos Group Plc added 2.3% after the software firm said it expects a strong growth in annual sales and new bookings.

The real estate sector rose 0.4% as data showed domestic house prices rose in May by more than in any other month this year on better economic outlook and steadier mortgage rates, as per property website Rightmove. ($1 = 0.7923 pounds)

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