UK stocks close higher as investors weigh corporate updates, US politics

(Reuters) -British stocks kicked off the week on a positive note following a slew of upbeat corporate updates, while investors weighed the impact of U.S. President Joe Biden's decision to end his re-election campaign.

The blue-chip FTSE 100 index closed up 0.5%, while the mid-cap FTSE 250 gained 0.3%, with both the indexes rebounding from declines on Friday.

Major Wall Street indexes ticked higher as investors assessed the odds of a second term for Republican nominee Donald Trump in the Nov. 5 election after Biden withdrew from the race.

"If you were hoping for markets to come into the new week having shaken off a lot of last week's volatility - that's what you've got really," said Chris Beauchamp, chief market analyst at IG Group.

Most sub-sectors traded higher as the market recovered from the declines on Friday that were triggered by disappointing UK retail sales data and weaker commodity prices.

The release of U.S. gross domestic product and inflation data later this week could shed light on the Federal Reserve's monetary policy path, with investors also looking to earnings from Wall Street giants including Alphabet and Tesla for market direction.

Rentokil surged 7.8% to the top of the FTSE 100 after a report said the former chief of BT Group, Philip Jansen, is working on a private equity-backed takeover bid for the pest-control firm.

Entain climbed 1.8% after the sports betting and gaming group said Gavin Isaacs has been appointed as its new CEO, effective on Sept. 2.

Putting pressure on the midcap index, Wizz Air slid 10% after Irish peer Ryanair missed quarterly profit estimates.

Ocado jumped 12.2% after the online supermarket and technology group said its U.S. partner Kroger had placed an order for a wide range of new automated technologies.

(Reporting by Purvi Agarwal and Roshan Abraham in Bengaluru; Editing by Varun H K and Paul Simao)