By Patrick Munnelly, Market Strategist, Tickmill
On Monday, the UK’s FTSE 100 experienced early gains, reaching its highest levels in over a week.
The rise was primarily driven by the energy sector, as top oil exporter Saudi Arabia made a commitment to reduce oil supplies.
This announcement led to a 1.2% surge in energy stocks and propelled the resource-heavy FTSE 100 to its highest level since May 24.
However, the bullish sentiment and risk appetite faded as the London close approached with the index ending the day down 7 points at 7599.99.
FTSE 100 biggest movers
Miners were weighing the index as metals remain under pressure, Endeavour Mining [LON:EDV] sat at the bottom of the index, nursing losses of just over 3.7%, with Fresnillo LON:FRES near the bottom, down 1.5% on the session.
In single stock news Mondi LON:MNDI has decided to cancel a deal with an investment vehicle owned by Russian billionaire Viktor Kharitonin for its largest plant in Russia due to a “lack of progress” in obtaining the required approvals.
Following this announcement, shares in the paper and packaging company declined by over 2.4%.
The deal, valued at approximately 95 billion Russian rubles (equivalent to around £944 million), will not proceed as initially anticipated.
On the positive side of the ledger, shares of investment company abrdn LON:ABDN saw a notable increase, rising as much as 4.3% to 212.3 pence before closing up 3.19%.
The company emerged as the top percentage gainers on the UK’s blue-chip index.
This positive movement came after abrdn announced the initiation of a share repurchase program, valued at up to £150 million ($185.90 million).
The program will be carried out by J.P. Morgan Securities Plc, which will purchase up to 300.1 million ordinary shares of abrdn between June 5 and September 5.
Despite the stock receiving mixed ratings from brokerages, with two rating it as “buy,” three as “hold,” and eleven as “sell” or lower, the median price target stands at 190 pence.
UK service sector maintains growth
On the fundamental front, the UK’s service sector maintained its strength in May, with growth remaining close to the 12-month peak reached in April.
According to the seasonally adjusted S&P Global/CIPS UK Services PMI, the index recorded a reading of 55.2 in May.
This was slightly lower than April’s figure of 55.9 but still above the neutral 50.0 mark for the fourth consecutive month.
Survey respondents highlighted resilient customer demand and expressed cautious optimism about the near-term growth prospects, despite the challenges posed by elevated inflation and budget constraints.
Increased output in the service sector was often attributed to higher consumer spending on services such as tourism and leisure.
Additionally, there were numerous reports indicating a surge in demand for technology-related services.
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