London Markets

Jan. 4, 2021, 6:00 a.m. EST

Mining sector drives big rally for FTSE 100 as gold and other metals surge

By Steve Goldstein

U.K. stocks surged on Monday, buoyed by a rally for the mining sector as metals futures jumped.

The FTSE 100 (FTSE:UK:UKX) rose 2.6%, its best single day of gains since the 4.7% surge after U.S. drug company Pfizer first announced the effectiveness of its coronavirus vaccine.

Mining giant Rio Tinto (LON:UK:RIO) had the largest upward pull on the FTSE 100, as miners including Polymetal International (LON:UK:POLY) , Fresnillo (LON:UK:FRES) , Glencore (LON:UK:GLEN) and Anglo American (LON:UK:AAL) all surged with commodity prices in demand. The dollar fell to its lowest level since April 2018, and there were big gains for gold , copper (NYM:HG00) , silver (NYM:SI00) and platinum (NYM:PL00) .

The gains for commodities came on hopes for the global economy. The U.K. on Monday become the first nation to inoculate with the vaccine made by drug company AstraZeneca (LON:UK:AZN) , which also posted strong gains.

U.S. stock futures (CME:ES00) also gained ground on the first trading day of 2021.

U.K. banks including Natwest Group (LON:UK:NWG) and home builders such as Taylor Wimpey (LON:UK:TW) slipped, a sign traders were less optimistic about companies more exposed to the U.K. economy than the global one.

Shares of U.K. gaming company Entain (LON:UK:ENT) jumped 27% to 1,429 pence, after rejecting the proposed 1,383 pence per share bid from MGM Resorts (NYS:MGM) that valued the company at £8.09 billion. Entain, the owner of brands including Ladbrokes, said the proposal significantly undervalues the company and its prospects. Entain also asked for “additional information in respect of the strategic rationale for a combination of the two companies.”

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