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Weaker pound lifts FTSE 100, midcap index hits record high on recovery optimism

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By Devik Jain

(Reuters) -London’s FTSE 100 climbed on Wednesday as heavyweight commodity stocks gained and a weaker pound lifted exporters, while a surge in shares that stand to benefit from an economic re-opening pushed the domestically focused FTSE 250 index to a record high.

The blue-chip index rose 0.9%, with large dollar-earning consumer staples companies, including Unilever, Diageo Plc, and British American Tobacco, gaining between 0.6% and 1.6% on a softer pound. [GBP=]

Financial stocks Barclays Plc, Lloyds Banking Group, and Prudential Plc were among the biggest boost to the index.

Energy Group BP Plc and Royal Dutch Shell Plc rose 2.8% and 1.2%, respectively, while miners Rio Tinto, BHP, and Glencore Plc added over 1% each on higher crude and metal prices. [O/R] [MET/L]

The mid-cap FTSE 250 index advanced 0.8% to touch 22,170.13 points. Industrials, consumer discretionary and real-estate stocks provided the biggest boost to the index.

“As Brexit is well behind us and with the vaccine rollout happening much quicker and more successful than elsewhere, we think that the UK stock market should do particularly well,” said Simona Gambarini, markets economist at Capital Economics.

“The UK stock market has a lot of mining, energy and financials stocks and all of those should benefit from the economy reopening and more generally from a pick-up in the global economy.”

Britain began rolling out Moderna Inc’s COVID-19 vaccine on Wednesday in Wales in a boost to the country’s health system after supplies of other shots started to slow.

The FTSE 100 has risen 6.6% so far this year, supported by speedy vaccine rollouts and a raft of economic stimulus, but has traded in a tight range since early-January as a resurgence in virus cases across Europe and a jump in treasury bond yields has made investors cautious.

Among other stocks, Hilton Food Group rose 3.8% on higher annual pre-tax profit, while over-50s holidays group Saga jumped 10.8% after it posted profit on an underlying basis.

(Reporting by Devik Jain in Bengaluru; Editing by Subhranshu Sahu and Uttaresh.V)

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