London stocks rise as US averts default; Dechra surges

(For a Reuters live blog on U.S., UK and European stock markets, click or type LIVE/ in a news window.) *

Pelatro up on middle-east contract win *

EQT to buy Dechra, shares jump *

Miners, energy stocks rise on higher commodity prices *

FTSE 100 logs second-straight week in loss *

FTSE 100 up 1.6%, FTSE 250 adds 1.7% (Updates prices to market close, adds analyst comments in paragraph 8)

By Johann M Cherian and Shashwat Chauhan June 2 (Reuters) -

British equities rose on Friday as investors adopted a risk-on mood after the U.S. passed a deal to avert a catastrophic debt default, while shares of Dechra Pharmaceuticals surged after the veterinary drugmaker agreed to be taken private. All major FTSE 350 sectors closed in the green.

The internationally focussed FTSE 100 climbed 1.6% as risk appetite grew after the U.S. Senate passed legislation to raise the $31.4 trillion federal debt ceiling. Hopes that the Federal Reserve might stand pat on rates also aided sentiment. The domestically focused FTSE 250 rose 1.7%, boosted by a 7.6% surge in Dechra after it agreed to be bought by investment firm EQT for an equity value of 4.46 billion pounds ($5.62 billion).

However, the FTSE 100 posted a 0.3% weekly decline, extending the previous week's drop, on worries that further monetary tightening by the Bank of England could strain corporate earnings, and as analysts flagged stagflation risks. The mid-cap FTSE 250 added 1.9% for the week.

Energy firms and industrial metals miners added 2.2% and 4.2%, respectively, as commodity prices rebounded. A report on top-commodities consumer China working on new measures to support its embattled property market fueled optimism.

"Today's reports of a possible stimulus plan have prompted a strong rebound for the whole sector," said Michael Hewson, chief market analyst at CMC Markets UK. China-exposed insurer Prudential jumped 5.7%, while banks Standard Charted and HSBC added 3.5% and 1.5% respectively.

Among other movers, Pelatro jumped 19.2% after the marketing firm won a contract in the Middle East. A

media report stated Amazon.com Inc is in talks with several telecom providers to offer low-cost or possibly free mobile phone service to U.S. Prime subscribers.

UK telecom stocks such as Vodafone Group and BT Group fell 0.7% and 3.4% respectively. ($1 = 0.8010 pounds)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)