UK stocks were trading in the black by mid-afternoon on Monday (11 July), with housebuilders driving the FTSE 100 higher and the FTSE 250 boosted by news that Theresa May was set to become the new Prime Minister.
Earlier in the day, Andrea Leadsom pulled out of the race to become the new leader of the Conservative Party, paving the way for Home Secretary to succeed David Cameron and May is expected to formally become the new Tory leader once the party board is consulted.
Following news of May's imminent appointment, the domestically-focused FTSE 250 gained 2.6% and hit a two-week high, although it remained down approximately 4% from the high reached on 23 June, the day of the European Union referendum.
"It's interesting to see such a recovery in the FTSE 250, having seen the FTSE 100 sheltered by its international exposure," said IG analyst Chris Beauchamp.
"With May's victory, there will no longer be a policy vacuum, and that's bound to help the UK-focused index, as well as battered housebuilders. It's a sign that investors are happy with the reduction in uncertainty surrounding the UK economy."
Mining stocks paced the way earlier in the session on the FTSE 100, with industry giants, Anglo American, Glencore, Antofagasta and BHP Billiton gaining ground as three-month LME-traded copper futures rose as much as 2.2% to $4,711 per metric tonne.
By mid-afternoon, however, it was the housebuilders turn to make inroads on London's blue chip index. Barratt Developments, Berkley Group Holdings and Taylor Wimpey all gained over 7%, while shares in Travis Perkins jumped 6.7% as one of the sectors worst hit by the post-Brexit volatility finally managed to draw breath.
Interest rates may be cut
On a very quiet day on the macroeconomic front, analysts were eager to point out that investors were already focused on the impending Bank of England's meeting on Thursday, which could see Threadneedle Street's officials cut interest rates.
"A plunge in consumer confidence and evidence of markedly reduced business sentiment since the Brexit vote has enhanced the case for interest rates to be cut from 0.50% to 0.25% as soon as Thursday.
"To us, there seems little reason to wait on an interest rate cut front," said economist Howard Archer at IHS Global Insight.
In afternoon trading the biggest risers in the FTSE 100 Index were Barratt Developments (402.30p, +7.80%), Travis Perkins (1,461.00p +7.58%), Berkeley Group Holdings (2,677.00p +7.47%), Taylor Wimpey 141.10p +7.30%, (Anglo American 797.50p +7.05%).
The biggest fallers in the FTSE 100 Index were Hikma Pharmaceuticals (2,558.00p -1.62%), Rolls-Royce Holdings (727.00p -1.09%), BT Group (393.10p -0.97%), Diageo (2,127.00p -0.77%), AstraZeneca (4,539.00p -0.77%).
In afternoon trading the biggest risers in the FTSE 250 Index were Crest Nicholson Holdings (418.00p, +9.45%), St. Modwen Properties (255.50p, +9.38%), Marshalls (242.20p, +8.37%), Virgin Money Holdings (232.60p, +8.24%), Kaz Minerals (136.50p, +7.99%).
The biggest fallers in the FTSE 250 Index were UBM (625.00p, -1.26%), CMC Markets (288.90p, -0.65%), IMI (969.50p, -0.56%).