London Markets: Miners and financials drive London gains

MADRID (MarketWatch) -- London stocks rose on Monday, with miners seeing a strong bounce after weekend elections in Australia, while gains for HSBC Holdings and Old Mutual supported the benchmark index on deal news.

The FTSE 100 index gained 0.5% to 5,220.76 points.

It closed down 0.3% on Friday following a week marked by global economic worries that spilled over from weak U.S. data.

That also left a dent in U.S. markets, with the Dow Jones Industrial Average posting its second consecutive weekly fall. See Market Snapshot

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With earnings season largely over, action in recent days has been event-driven and Monday was no exception.

Heavyweight banking group HSBC rose 0.8%, helping support the FTSE index, on news it's in exclusive talks to buy a majority stake in South Africa's Nedbank Group from U.K. insurer Old Mutual . See full story.

Old Mutual, whose shares jumped 4.3%, said such a deal would include an offer to all shareholders of Nedbank to buy up to 70% of the company. Shares of Nedbank rose over 6% in Johannesburg.

Among brewers, shares of SABMiller fell 0 installment payday loans.8% on a report in the Sunday Times of London that it may pay up to $10.9 billion for the beer operations of Australian-based Foster's Group . Shares of Foster's surged 8% in Sydney.

Gains for miners were also supporting the index. Australian polls closed Saturday without a clear winner in the general elections. Miners in London, heavily represented in the FTSE 100, have been gaining in recent days on hopes a Conservative win in the election will put an end to a controversial tax on profits for those companies. Australia is now possibly facing its first hung parliament in 70 years.

Shares of Kazakhmys and Xstrata each rose 1.8%, while Rio Tinto gained 1.6% and BHP Billiton advanced 1.7%.

Earnings news was behind gains for Petrofac , whose shares added 2.1%. The oil and gas services company said first-half net profit more than doubled and revenue rose 34%. Petrofac said it's confident it will be able to grow its backlog over the full year and also increased its dividend by 29% to 13.80 cents.

Shares of Irish-based Kingspan Group rallied 9% in Dublin and London after the building-materials firm posted operating profit growth for the first time in three years and said it expects robust revenue growth in the second half.

London Markets: Miners and financials drive London gains

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