FTSE 100 Live June 06: Traders return to more US rate jitters, Brent Crude above $120 a barrel

FTSE 100 Rallies, Melrose and Prudential up 4%

The blue-chip owner of GKN announced today that it will raise £520m in a landmark deal in the United States.

Melrose Industries said the sale of the Ergotron standing desk business marks its definitive exit from Air Management to Home Automation’s broader Nortek business, which it bought in 2016.

The FTSE 100-listed company, whose current interests include automotive, aerospace and powder metallurgy, said it has doubled shareholders’ initial investment in Nortek and transformed the companies themselves.

It plans to announce how it intends to use the Ergotron proceeds closer to the transaction’s closing date, which is due in the fall.

However, Melrose shares rose 4%, or 5.45p, to 138.85p as the move is likely to stoke hopes of another cash distribution to shareholders on top of the £729m paid out in September.

Melrose delayed a return in March because of the Ukraine war but said it hoped to resume payments as soon as possible.

Its shares sat near the top of a packed FTSE 100 riser board, with Rolls-Royce and Prudential also up 4% as traders returned to their desks in optimistic mood after the long weekend.

The easing of Covid restrictions in China was a factor in the FTSE 100 rising 1.2% or 91.71 points to 7624.66 as the Pru rose 46p to 1064p and miners including Anglo American and Antofagasta, up 3%.

With Brent crude still above $120 a barrel after Thursday’s Opec meeting failed to deliver a meaningful output boost, BP shares rose 3%, or 12.45 pence, to 443.75 pence.

Elsewhere in the oil industry, shares in North Sea-focused producer Serica Energy rose 9% after fears about the impact of the government’s planned windfall tax were allayed.

The AIM-listed company, which operates the Bruce, Keith and Rhum fields, pointed out that the levy is part of a package that includes significant investment incentives “to encourage companies like Serica to continue reinvesting profits.”

Serica shares rose 21.5p to 273p, still below the 400p seen in mid-April.

However, a 24% decline will mean more sleepless nights for Eve Sleep shareholders after the mattress retailer warned it might not meet expectations for the current year. It has initiated a strategic review to find a new owner or investment partner. Shares fell 0.35p to 1.3p.