London stocks rise as US averts default; Dechra surges
June 2 (Reuters) - British equities rose on Friday as investors adopted a risk-on mood after the U.S. passed a deal to avert a catastrophic debt default, while shares of Dechra Pharmaceuticals surged after the veterinary drugmaker agreed to be taken private.
All major FTSE 350 (.FTLC) sectors closed in the green.
The internationally focussed FTSE 100 <.FTSE> climbed 1.6% as risk appetite grew after the U.S. Senate passed legislation to raise the $31.4 trillion federal debt ceiling. Hopes that the Federal Reserve might stand pat on rates also aided sentiment.
The domestically focused FTSE 250 (.FTMC) rose 1.7%, boosted by a 7.6% surge in Dechra (DPH.L) after it agreed to be bought by investment firm EQT for an equity value of 4.46 billion pounds ($5.62 billion).
However, the FTSE 100 posted a 0.3% weekly decline, extending the previous week's drop, on worries that further monetary tightening by the Bank of England could strain corporate earnings, and as analysts flagged stagflation risks.
The mid-cap FTSE 250 (.FTMC) added 1.9% for the week.
A report on top-commodities consumer China working on new measures to support its embattled property market fueled optimism.
"Today's reports of a possible stimulus plan have prompted a strong rebound for the whole sector," said Michael Hewson, chief market analyst at CMC Markets UK.
Among other movers, Pelatro (PTRO.L) jumped 19.2% after the marketing firm won a contract in the Middle East.
($1 = 0.8010 pounds)