London's FTSE 100 logs best month since April

By Purvi Agarwal and Shubham Batra

(Reuters) -London stocks ended July on a high note, supported by gains in energy and mining stocks and positive corporate updates, while investors eagerly await the U.S. Federal Reserve's interest rate decision.

The blue-chip FTSE 100 index gained 1.1% to log its best month since April, while the FTSE 250 index added 0.8% as the midcaps had their best month this year.

Energy shares jumped 2.3%, as the index rebounded from Tuesday's losses.

Top players such as BP and Shell gained more 1.6% and 2.7% respectively, after the killing of Hamas' leader ratcheted up tensions in the Middle East and pushed oil prices higher by more than $1 per barrel. [O/R]

Industrial metal miners led sectoral gains, rising 2.7% as prices of most base metals firmed. [MET/L]

HSBC climbed 4.0% after the bank pledged to buy back $3 billion in shares, and reported stable first-half profit that beat estimates. It propelled banks 2.0% higher to their highest levels since May 2018.

Investors' focus is now trained on the Fed's monetary policy decision due later in the day, which could influence the outlook on rate cuts globally.

Though the Fed is widely expected to hold rates, markets are anticipating hints for a September cut, after recent data supported the trend of cooling inflation.

The Bank of England's decision also loomed on Thursday, with markets pricing in a more-than-58% chance of the central bank making its first cut since 2020. [0#BOEWATCH]

Also on the radar was a crucial jobs report in the U.S. and more quarterly earnings from U.S. big tech companies.

In London, GSK slipped 2.0%, despite a higher annual earnings and sales forecasts and second-quarter results that beat market expectations.

(Reporting by Purvi Agarwal and Shubham Batra in Bengaluru; Editing by Alex Richardson)