Hot sectors: mining shares, oils and housebuilders take off

There are fresh catalysts giving these stocks a boost today. Find out who the big movers are.

Oil prices above $70 a barrel and a China-led boost to economic optimism sent commodity stocks surging as much as 4% in a session not exactly helpful for inflation jitters.

With figures showing China's manufacturing sector continued to expand at pace in May, supported by greater demand both at home and overseas, shares in the mining sector returned to form in spectacular fashion at the start of the new month.

Anglo American (LSE:AAL) and Rio Tinto (LSE:RIO) set the pace with gains of 4%, having been under pressure in recent sessions after China threatened price controls on some commodities, and as several countries mulled higher mining taxes to pay for social spending.

Copper has fallen from the record $10,747 a tonne on the London Metal Exchange seen last month, but was back trading above the $10,000 threshold earlier today.

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The Brent crude price was further lifted by expectations for a demand boost as global economies rebuild and the US begins its summer driving season. The Opec group of oil producing countries meets this week and is expected to ease some supply curbs, although this wasn't enough to stop Brent lifting above $70 a barrel for the first time since March.

BP (LSE:BP.) and Royal Dutch Shell (LSE:RDSB) were 2% higher in the FTSE 100, and Africa and South American oil explorer Tullow Oil (LSE:TLW) was the biggest riser in the FTSE 250 index after a gain of more than 6%.

The rally comes as investors fret that the global economy is in danger of overheating, particularly with a record $6 trillion budget by US president Joe Biden still to come.

Fears of interest rate hikes to control inflation have provided regular jolts to stock markets in recent weeks, with the lofty valuations of high growth tech stocks among those impacted.

Components in short supply and raw material costs surging have prompted Tesla (NASDAQ:TSLA) boss Elon Musk to warn at the weekend that vehicle prices will have to rise. In the UK, builders merchant Travis Perkins (LSE:TPK) is hiking the price of cement, chipboard and paint from this week.

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Today's latest figures from Nationwide showing house price growth at its highest level in seven years, fuelled by strong demand and government support measures, will add to the fears about a sooner-than-expected rise in interest rates in the UK.

Nationwide said prices soared 10.9% in the year to May, taking the average figure to £242,832. Builders including Persimmon (LSE:PSN) and Barratt Developments (LSE:BDEV) rose 2% and online platform Rightmove (LSE:RMV) also improved 1.5% on the back of today's update.

Royal Mail jumps the gun

Overall, the FTSE 100 index jumped more than 1% to 7,094 and the domestic-focused FTSE 250 rose 0.8%. It was also the first day back in the top flight for Royal Mail (LSE:RMG) after its expected promotion was brought forward by the completion of the RSA Insurance Group (LSE:RSA) takeover.

Shares in the parcels delivery firm marked the occasion by rising another 2% to 592.2p, having doubled in value since November amid the boom in online shopping during the pandemic. Analysts are increasingly positive, with JP Morgan having an 801p target price.

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The quarterly FTSE 100 reshuffle, which is based on share prices at tonight’s stock market close, is currently set to see ITV (LSE:ITV) replace engineering firm Renishaw (LSE:RSW).