LONDON MARKETS: FTSE 100 Jumps To 3-month High, As Oil Rally Buoys BP And Shell
May 10 2018 - 3:51AM
Dow Jones News
By Carla Mozee and Sara Sjolin, MarketWatch
Vodafone strikes nearly $23 billion deal with Liberty Global
London's benchmark for blue-chip stocks pushed higher Wednesday,
buoyed largely by shares of oil producers, which rose as crude
prices rallied in the wake of the U.S. decision to resume sanctions
on Iran.
Meanwhile, shares of Vodafone PLC popped higher on confirmation
that the British telecommunications company has agreed a nearly $23
billion deal to buy some European assets from Liberty Global
PLC.
How markets are moving
The FTSE 100 index climbed 1.3% to end at 7,662.52, closing at
its highest level since Jan. 29, according to FactSet data.
The pound rose to $1.3569 from $1.3546 late Tuesday in New York,
as traders looked head to the Bank of England meeting on
Thursday.
Read:The pound at $1.3850 or $1.3350? It all rests on the BOE's
'Super Thursday', ING says
(http://www.marketwatch.com/story/the-pound-at-13850-or-13350-it-all-rests-on-the-boes-super-thursday-ing-says-2018-05-09)
What's driving markets
The FTSE 100 was outperforming most of its counterparts in
Europe as shares of BP PLC and Royal Dutch Shell PLC scaled toward
the top of the index. The oil-and-gas sector has a weighting of
nearly 17% on the FTSE 100, the second-largest sector after
financials, according to FactSet data.
Shares of oil producers rose as U.S. crude and Brent prices
jumped almost 3% on Wednesday
(http://www.marketwatch.com/story/oil-rebounds-back-above-70-a-barrel-as-supply-optimism-overshadows-iran-deal-2018-05-09),
bringing West Texas Intermediate above $71 a barrel and to highs
not seen in more than three years.
Oil prices, which have been swinging in recent sessions,
initially dipped but eventually advanced after U.S. President
Donald Trump late Tuesday said he would impose "powerful" new
sanctions on Iran as the U.S. withdraws from the Iran nuclear deal
(http://www.marketwatch.com/story/trump-says-us-is-withdrawing-from-iran-nuclear-deal-2018-05-08).
The reinstatement of Iranian sanctions could result in tighter
global oil supplies, because they make it more difficult for Iran
to export oil, according to some analysts.
Read:U.S. out of Iran deal -- Boeing will lose out on $20
billion in business
(http://www.marketwatch.com/story/boeing-will-lose-out-on-20-billion-in-iran-deals-as-airbus-ge-impacted-2018-05-08)
In Brexit news, U.K. Prime Minister Theresa May suffered another
blow to her divorce plans after the House of Lords in a vote late
on Tuesday backed calls for Britain to remain in the single market
after the EU exit.
What are strategists saying?
"In contrast to yesterday the FTSE 100 has soared today, boosted
by the energy firms on expectations that higher oil prices will
result from the Iran deal," said Chris Beauchamp, chief market
analyst at IG, in a note.
"It may not be quite as clear-cut as that, at least not in the
short term, since oil's remarkable run has now reached the stage
where it is being talked about outside of financial markets. This
is usually a sign that the rally has at least peaked for the time
being," he added.
Stock movers
BP PLC (BP.LN) (BP.LN) gained 3.9%, and Royal Dutch Shell PLC
(RDSA.LN) (RDSA.LN) bulked up 3.4% as oil prices jumped.
Imperial Brands PLC (IMBBY) (IMBBY) jumped 6.2% to the top of
the FTSE 100 after the tobacco company laid out plans to sell
assets
(http://www.marketwatch.com/story/imperial-brands-profit-down-25-plans-2b-selloff-2018-05-09)
to raise around 2 billion pounds ($2.7 billion) in the next year or
two.
Burberry Group PLC shares (BRBY.LN) (BRBY.LN) tumbled 6.1% after
Belgian holding company Groupe Bruxelles Lambert (GBLB.BT) said it
has sold a 6.6% stake
(http://www.marketwatch.com/story/groupe-bruxelles-lambert-sells-burberry-stake-2018-05-09)
in the British luxury goods maker.
Vodafone (VOD.LN)(VOD.LN) ended 0.6% higher after the company
agreed to buy operations in Germany, Hungary, Romania and the Czech
Republic from Denver-based cable giant Liberty Global PLC (LBTYA).
The deal, valued at EUR19 billion ($23 billion)
(http://www.marketwatch.com/story/vodafone-to-pay-23-billion-for-liberty-assets-2018-05-09),
doesn't include Liberty businesses in the U.K. and Ireland, which
compete with Vodafone's.
Compass Group PLC (CPG.LN) dropped 4.8% as the food services
company posted a fall in first-half 2018 pretax profit
(http://www.marketwatch.com/story/compass-group-profit-falls-hit-by-fx-effects-2018-05-09)
to GBP792 million ($1.07 billion), which is said was partly due to
foreign exchange effects.
(END) Dow Jones Newswires
May 10, 2018 03:36 ET (07:36 GMT)
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