(Sharecast News) - London stocks closed higher on Monday, led by sharp gains among lenders following a favourable Supreme Court ruling on motor finance commissions.
The FTSE 100 index rose 0.66% to 9,128.30 points, while the FTSE 250 climbed 0.74% to 21,859.50 points.
Sterling was little changed against the dollar at $1.3283, while it firmed 0.28% versus the euro to change hands at 1.1491.
Investor sentiment in London rebounded after a tariff-driven selloff last week, with AJ Bell investment director Russ Mould noting that "the FTSE 100 managed a cautious recovery on Monday morning."
However, concerns lingered over the global trade outlook following recent tariff actions by the US and the dismissal of the head of the Bureau of Labor Statistics by president Donald Trump, which raised doubts about the reliability of American economic data.
Eurozone investor confidence deteriorates, US factory orders fall
In economic news, eurozone investor confidence deteriorated sharply in August.
Sentix's index fell to -3.7 from +4.5 in July, the lowest since April, with analysts citing the recent EU-US tariff deal as a key drag on sentiment.
"The wrinkles of concern in the economy are deepening again," Sentix said, noting a 12-point slump in the Germany index to -12.8.
Across the Atlantic, US factory orders fell 4.8% in June, the steepest drop since April 2020, dragged down by a 22.4% decline in transportation equipment orders, according to Census Bureau data.
That followed an 8.3% surge in May, driven by a brief recovery in demand amid trade-related volatility.
Banks and lenders lead rally after Supreme Court ruling
On London's equity markets, bank stocks were the standout performers after the UK Supreme Court ruled that hidden commissions on car loans were not unlawful, significantly reducing the risk of large-scale compensation payouts.
Lloyds Banking Group surged 9%, its biggest daily gain in over nine years.
Barclays added 1.63%, and Close Brothers Group soared 23.52%, leading the FTSE risers.
Close Brothers, which had set aside 165m in provisions, said it would review that in light of the ruling but did not expect any material changes.
Lloyds also said it would maintain its 1.2bn provision, but that additional provisions were unlikely to be significant.
Analysts noted the ruling had defused the threat of a new mis-selling scandal akin to PPI.
"The worst-case scenario, like a particularly ugly pothole, has been swerved," Mould said, though he added the Financial Conduct Authority's plan for a compensation scheme could still create some risk for lenders.
Elsewhere, oil major BP climbed 1.84% after announcing its tenth oil and gas discovery of the year, this time at the Bumerangue prospect offshore Brazil.
The find, described by BP as its largest in 25 years, added to a growing list of hydrocarbon-focused projects amid efforts to reassure investors of its post-green pivot.
"BP will want to use its latest numbers to convince the market it has truly revamped its strategy," said Mould.
Shipping broker Clarkson gained 5.12% despite reporting softer first-half earnings, with investors cheered by unchanged full-year guidance.
Wizz Air rose 3.35% after reporting a 6.8% increase in July passenger numbers.
On the downside, Auction Technology Group plunged 21.67% after announcing the $85m acquisition of Chairish, a US vintage furniture marketplace.
Medical firm ConvaTec slipped 0.87% after its CEO took medical leave, while engineering firm Senior dropped 3.51% after posting weaker-than-expected revenue.
Investors were now looking to Thursday's Bank of England decision, with markets widely expecting a 25-basis point rate cut to 4%.
TickMill's Patrick Munnelly said the prospect of lower rates contributed to Monday's equity rebound, particularly among lenders.
UK inflation, which neared double the central bank's 2% target in June, remained a key concern for policymakers.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 9,128.30 0.66%
FTSE 250 (MCX) 21,859.50 0.74%
techMARK (TASX) 5,249.01 0.06%
FTSE 100 - Risers
Lloyds Banking Group (LLOY) 82.56p 9.00%
St James's Place (STJ) 1,353.00p 4.24%
London Stock Exchange Group (LSEG) 9,636.00p 3.46%
CRH (CDI) (CRH) 7,368.00p 3.31%
NATWEST GROUP (NWG) 527.80p 3.17%
Rolls-Royce Holdings (RR.) 1,090.00p 2.35%
BT Group (BT.A) 211.50p 2.08%
SEGRO (SGRO) 643.20p 2.00%
Legal & General Group (LGEN) 259.00p 1.97%
Phoenix Group Holdings (PHNX) 674.00p 1.97%
FTSE 100 - Fallers
Haleon (HLN) 355.80p -2.63%
Rentokil Initial (RTO) 354.30p -2.02%
Next (NXT) 12,115.00p -1.74%
Spirax Group (SPX) 6,130.00p -1.68%
Croda International (CRDA) 2,590.00p -1.41%
Pershing Square Holdings Ltd NPV (PSH) 4,102.00p -1.25%
IMI (IMI) 2,146.00p -1.19%
Kingfisher (KGF) 266.10p -1.15%
The Sage Group (SGE) 1,188.00p -1.12%
Shell (SHEL) 2,682.00p -0.92%
FTSE 250 - Risers
Close Brothers Group (CBG) 491.40p 23.53%
Aston Martin Lagonda Global Holdings (AML) 71.60p 6.79%
Watches of Switzerland Group (WOSG) 346.20p 5.94%
Ocado Group (OCDO) 349.10p 5.56%
4Imprint Group (FOUR) 3,735.00p 5.21%
Clarkson (CKN) 3,590.00p 5.12%
Endeavour Mining (EDV) 2,428.00p 3.76%
Hochschild Mining (HOC) 300.60p 3.51%
Kier Group (KIE) 206.00p 3.41%
Wizz Air Holdings (WIZZ) 1,295.00p 3.35%
FTSE 250 - Fallers
Auction Technology Group (ATG) 376.00p -21.67%
Senior (SNR) 187.20p -3.51%
Inchcape (INCH) 672.00p -2.04%
Pantheon Infrastructure (PINT) 102.50p -1.92%
Spire Healthcare Group (SPI) 207.00p -1.90%
Kainos Group (KNOS) 704.00p -1.88%
Frasers Group (FRAS) 667.00p -1.62%
NCC Group (NCC) 146.40p -1.61%
ITV (ITV) 80.45p -1.59%
Victrex plc (VCT) 680.00p -1.45%
59.72 (0.66%)
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