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* Rio Tinto drops on lower iron-ore shipment forecasts
* Mediclinic top mid-cap gainer on strong H1 revenue growth
* FTSE 100 at near 20-month highs
* FTSE 100 up 0.4%, FTSE 250 adds 0.5%
Oct 15 (Reuters) - London's FTSE 100 rose to a near 20-month
high on Friday, recovering all losses since the pandemic began,
helped by gains in heavyweight oil and banking shares as
investors were optimistic about a steady economic recovery.
The FTSE 100 index advanced 0.4%. The
commodity-heavy index was up 1.8% for the week and recorded its
best week since May this year, with precious and
industrial miners the biggest gainers.
The "UK has been quite positive over the last few weeks so
supply chain shortages haven't really been holding back the
markets," said Thomas Mathews, markets economist at Capital
The FTSE 100 has risen nearly 12% this year to its highest
since February 2020, supported by upbeat earnings, accommodative
central bank policies and gains in oil and metal prices, which
boosted commodity-related stocks.
However, inflation worries and supply-chain disruptions led
the blue-chip index to underperform the wider European stock
index, which recovered to pre-pandemic levels at the
beginning of this year.
"There is risk that if the labour or product shortages stick
around for a bit longer, it could become a more of a permanent
drag on earnings and you might see stocks struggle as well,"
Banks gained 1.8% on the day and gave the
second biggest boost to the index, with HSBC Holdings plc
adding 1.9% after Barclays and Bank of America raised
their price targets on the stock.
The largest percentage gainer on the FTSE 100 was IAG
, up 3.3% after the British Airways owner said its
finance chief, Steve Gunning, would step down after the
airline's 2021 results report and named Premier Inn hotel
operator Whitbread's Nicholas Cadbury as his successor.
The domestically focussed mid-cap index added 0.5%,
lifted by travel and leisure stocks.
Mediclinic was the top performer on the mid-cap
index after it reported strong first-half revenue growth, which
was ahead of pre-pandemic levels.
Rio Tinto Group fell 1.4% after the miner reduced
its 2021 iron ore shipments forecast.
Global education group Pearson dropped 14.9% to the
bottom of the FTSE 100 after saying that COVID-19 and a tight
labour market had hit enrolments at U.S. community colleges.
(Reporting by Bansari Mayur Kamdar, Shashank Nayar and Amal S;
Editing by Amy Caren Daniel and Jonathan Oatis)