British shares advanced on Monday, led by a rise in mining companies which were supported by firmer oil prices and a weaker dollar, though mid cap Mitie Group slumped after a profit warning.
The blue chip FTSE 100 index was up 1.4 percent at 6,805.26 points by 0855 GMT, set for its biggest daily rise in two weeks and in line with the broader European market.
Analysts said they expected markets to be volatile ahead of Wednesday’s interest rate decisions from the Bank of Japan and U.S. Federal Reserve.
“I don’t necessarily think (the rise) is an indication of really strong sentiment – I think markets are more likely to be a bit up and down before the (central bank) meetings,” Jasper Lawler, market analyst at CMC Markets, said.
The FTSE 100 bounced back after posting its second straight week of losses on Friday, weighed down by a sell-off in banks after U.S. authorities demanded Germany’s Deutsche Bank pay $14 billion to settle a mortgages case.
However, a firmer oil price supported the FTSE 100’s commodity-related companies, with oil prices up after Venezuela said a deal to stabilize oil markets could be announced this month.
Mining companies Anglo American, Polymetal , BHP Billiton, Glencore, Fresnillo and Rio Tinto were all at the top of the board, up between 2.8 to 4.2 percent, also helped by a weaker dollar which makes the underlying commodities cheaper for holders of foreign currency.
While only a handful of FTSE 100 stocks suffered losses, mid cap Mitie Group plunged more than 23 percent on the FTSE 250, on track for its biggest daily loss since 1987, after issuing a profit warning.
The outsourcing firm lowered its full-year operating profit outlook, citing a reduction in higher margin project volumes and spending by clients in the wake of Britain’s vote to leave the European Union.