UK's FTSE 100 rises as oil stocks gain; key announcements in focus

London's FTSE 100 index climbed on Monday as investors turned to defensive sectors like healthcare and consumer staples, with oil prices and bond yields resuming their uptrend ahead of central bank announcements. The blue-chip FTSE 100 index jumped 0.55% to 10,708.76 points by 0959 GMT. Conversely, the midcap FTSE 250 index declined 0.4% to 23,878.45, its lowest point in over a month.

Oil prices surged by about 3%, after fresh attacks on Saudi Arabian infrastructure and Gulf shipping. Oil giants Shell and BP also saw gains of around 1.1% each, as energy stocks rose 1.1% overall. They helped cushion the FTSE 100, which posted its steepest weekly drop in over a month. Meanwhile, British government bond yields reached fresh multi-year peaks across maturities, drawing more investors towards traditionally safe sectors.

Pharmaceutical stocks surged 2.7%, with GSK advancing 3.7% after announcing promising results for two lung cancer drugs - Jideytro and Ris-Rez. Consumer-facing personal care, drug, and grocery sectors added 2.6% and 2.8% respectively. However, AI-related stocks faced a setback after CEOs of leading AI labs called for a more measured approach to technology development, causing a 1.8% slide in tech-linked futures.

Meanwhile, industrial and precious metal miners suffered the biggest percentage losses as metal prices slipped. Investors will now closely monitor UK employment and inflation reports, as well as the Bank of England's interest rate decision. The Federal Reserve is widely expected to hike rates by 25 basis points on Wednesday, with a 88.5% chance per CME's FedWatch Tool.

Prime Minister Andy Burnham also plans to meet with executives from banks, oil majors, and a telecom company on Monday to discuss economic growth plans. Data analytics and consulting firm GlobalData reported a 22% decline in the FTSE 250, anticipating more subdued annual revenue growth than previously expected.