By Barbara Kollmeyer, MarketWatch
Commodity stocks were doing the heavy lifting once again in London Wednesday, as the FTSE 100 headed for its third straight day of gains, with investors waiting for a key update on the U.K. government's spending plans.
The FTSE 100 rose 0.6% to 6,858.30, following a 0.6% advance on Tuesday. The benchmark was outperforming other key country-specific indexes in Europe, inspired in part by a second-straight record-breaking session for Wall Street. The Dow Jones Industrial Average closed above 19,000 for the first time (http://www.marketwatch.com/story/us-stocks-on-track-to-knock-out-fresh-record-highs-2016-11-22) on Tuesday.
All sectors were in the green in London on Wednesday, but the action was led by basic materials stocks.
"Yet again it is the mining sector driving equities higher, with iron ore prices rocketing as investors take an ultra-optimistic view of future demand," said Rebecca O'Keeffe, head of investment at Interactive Investor, in a note to clients.
But O'Keeffe cautioned against counting too much on increased demand for commodities from the U.S. following the election victory for Donald Trump. The Republican president-elect has pledged to raise spending on infrastructure, seen as potentially driving that demand. But for one thing, the U.S. gets most of its steel from scrap, O'Keeffe noted.
Momentum sticks with commodities: Nonetheless, familiar names were rising again, led by a 2% gain for Glencore PLC (GLEN.LN). Shares of BP PLC (BP.LN) (BP.LN) were up 1%, Rio Tinto PLC (RIO) (RIO) added 1.5%, and BHP Billiton PLC (BHP.AU) (BLT.LN) put on 2%.
Beyond that sector, heavyweight drug maker Shire PLC (SHPG) contributed with a 1.2% gain.
Autumn statement: U.K. Chancellor of the Exchequer Philip Hammond is scheduled to deliver his "autumn statement" to parliament (http://www.wsj.com/articles/what-to-expect-from-the-u-ks-treasury-chief-1479880802?mod=mktw) later today. The finance minister will lay out the government's first tax and spending plans since the country's Brexit vote in June to leave the European Union.
"With almost no money in the coffers to support any sort of stimulus, let alone a spending spree, Philip Hammond has limited options for today's Autumn Statement and a very difficult task ahead," said O'Keeffe.
The statement will be watched by investors for comments on infrastructure spending, measures to help low-paid workers, home-building initiatives and business investment. It should also cover the government's economic forecasts and budget goals.
Shares in real-estate agents were falling on expectations Hammond will introduce measures to reduce the fees tenants pay when finding a rental. Foxtons Group PLC (FOXT.LN) shares fell 10%, while Countrywide PLC (CWD.LN) lost 5.7%.
Hammond is scheduled to appear in parliament at 12:30 p.m. London time, or 7:30 a.m. Eastern Time.
(END) Dow Jones Newswires
November 23, 2016 04:35 ET (09:35 GMT)
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