(Reuters) -London’s FTSE 100 rose on Monday, led by HSBC after its first-half profit more than doubled, while a slew of mergers and acquisitions activity helped push mid-cap stocks to record highs.
HSBC Holdings gained 1.9% and was the top boost to the blue-chip FTSE 100 index after it reported forecast-beating first-half pretax profit that more than doubled from a year earlier, when it made huge provisions for pandemic-related bad loans.
“The worse-case scenario of an increase in bad loans hasn’t materialised, so the bank (HSBC) has been confident enough to release over $700 million that had been set aside as a buffer, in a stark contrast to a year ago when it clocked up $6.9 billion in impairment charges,” Susannah Streeter, a senior analyst at Hargreaves Lansdown, said in a note.
The FTSE 100 rose 0.9%, led by banks, oil stocks and base metal miners.
The domestically focussed mid-cap index climbed 1.4% to a record, led by Meggitt and Sanne Group on takeover deals.
British engineering group Meggitt surged 58.4% on a 6.3 billion pound takeover offer from U.S. industrial firm Parker-Hannifin, while asset manager Sanne Group jumped 8.1% on a $2 billion offer from Apex.
The FTSE 100 has gained 9.8% so far this year and is nearly 9.7% away from its record high, supported by the reopening of the economy and strong earnings.
However, it has largely underperformed its mid-cap and European peers and currently trades at the cheapest valuation among its peers.
Britain’s SSE gained 1.2% after it said it would sell its 33.3% stake in gas distribution operator Scotia Gas Networks for 1.225 billion pounds ($1.70 billion).
In earnings, British jet and auto parts supplier Senior Plc rose 2.8% after it reported a first-half profit and kept its annual outlook unchanged.
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