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FTSE picks itself up from four-month low

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FTSE picks itself up from four-month low

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By Kit Rees LONDON (Reuters) – The FTSE 100 advanced on Monday, rebounding from the previous session’s four-month low as shares in financials rose and higher oil prices boosted energy shares. The blue chip FTSE 100 <.FTSE> index was up 0.4 percent at 7,243.76 points by 0843 GMT, joining in with a broader rally in risky assets across European bourses. Financials, which tend to be more volatile than other sectors, added the most to gains, with shares in HSBC <HSBA.L>, Lloyds <LLOY.L> and Barclays <BARC.L> gaining 0.3 percent to 1.1 percent. Other cyclical sectors, such as energy, also rose, with heavyweights BP <BP.L> and Royal Dutch Shell <RDSa.L> up 0.9 percent and 0.5 percent respectively as underlying oil prices hit $50 per barrel. [O/R] Last week a surge in sterling had dampened the FTSE 100, which dropped to its lowest level since the end of April as its predominantly international, dollar-earning firms were hit by the currency’s rally. On Monday, the pound eased back slightly ahead of a speech by Bank of England governor Mark Carney, having hit its highest level since the Brexit vote. “The prospect of a softer Brexit and rising expectations of an interest rate hike could lead to a further appreciation of the GBP against the EUR. Conversely, a stronger GBP is weighing on UK equities,” analysts at Credit Suisse Wealth Management said in a note. “We remain negative on UK equities given their high overseas exposure.” Defence firm BAE Systems <BAES.L> was among the biggest individual risers, gaining 2.7 percent after Qatar signed a deal to buy 24 modern Typhoon aircraft from the company. “We believe the market was not expecting a Qatar order for Eurofighter – considering its previous orders for Rafales and F-15 military jets,” analysts at UBS said in a note. “Furthermore we believe the market could now allocate a higher probability for further orders from new/existing customers going forward,” UBS analysts added. Engineering firm <GKN.L> was another top gainer, jumping around 3 percent following an upgrade from Exane BNP Paribas to “neutral” from “underperform”, with the broker citing benefits from possible future disposals. Shares in defensive firms including tobacco firms Imperial Brands <IMB.L> and British American Tobacco <BATS.L> and precious metals miner Randgold Resources <RRS.L> brought up the rear on the FTSE. Outside of the blue chips, a jump in esure’s <ESUR.L> shares helped the mid cap <.FTMC> index gain 0.3 percent. Shares in esure soared 6.5 percent following a media report that the insurer’s biggest shareholder Peter Wood was looking to sell his 30.8 percent stake.

(Reporting by Kit Rees; Editing by Catherine Evans)
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