By Johann M Cherian and Shashwat Chauhan
(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 (LON:DPH) surged after the veterinary drugmaker agreed to be taken private.
All major FTSE 350 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 rose 1.7%, boosted by a 7.6% surge in Dechra 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 added 1.9% for the week.
Energy firms and industrial metals miners added 2.2% and 4.2%, respectively, as commodity prices rebounded. [O/R] [MET/L]
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.
China-exposed insurer Prudential (LON:PRU) jumped 5.7%, while banks Standard Charted and HSBC (LON:HSBA) added 3.5% and 1.5% respectively.
Among other movers, Pelatro jumped 19.2% after the marketing firm won a contract in the Middle East.
A media report stated Amazon.com Inc (NASDAQ:AMZN) is in talks with several telecom providers to offer low-cost or possibly free mobile phone service to U.S. Prime subscribers.
UK telecom stocks such as Vodafone Group (LON:VOD) and BT Group (LON:BT) fell 0.7% and 3.4% respectively.
($1 = 0.8010 pounds)