LONDON MARKETS: FTSE 100 Bounces Higher As Fed Effect Fades

By Carla Mozee, MarketWatch

Upbeat commodities put index on track for biggest gain in a month

U.K. stocks rose Friday, heading for their strongest session in a month, as markets recovered from a selloff on the back of concerns about U.S. interest-rate increases.

The FTSE 100 was up 1.4% at 6,138.84, on track for its largest percentage rise since April 13, according to FactSet data.

The blue-chip benchmark on Thursday dropped 1.8% (http://www.marketwatch.com/story/ftse-100-slides-to-6-week-low-after-fed-hints-at-rate-hike-2016-05-19) and closed at a two-month low as U.S. Federal Reserve minutes suggested policy makers will increase interest rates as soon as their June meeting.

Friday's advances arrived "as concerns about U.S. rate-hike timing following the release of the latest [Fed minutes] ease into the end of what has been an exciting, yet volatile, week," said Accendo Markets analysts in a note.

The moves were pushing the London benchmark just into positive territory for the week.

Movers: The basic materials and oil and gas sectors put in the strongest performances. Commodity shares, which make up about a fifth of the FTSE 100, topped the index in part as the dollar edged lower.

Shares of platinum producer Anglo American PLC (AAL.LN) climbed 4.5%, Glencore PLC (GLEN.LN) picked up 2.9% and oil major Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) rose 1.9% as Brent crude recaptured the $49-a-barrel level.

On the mid-cap FTSE 250 , Ladbrokes PLC (LAD.LN) shares rallied 10% after a competition regulator released provisional findings of an investigation into a planned merger with Gala Coral Group Ltd. It said the two bookmakers may have to sell up to 400 betting shops for their merger to be conditionally approved. (http://www.marketwatch.com/story/ladbroke-shares-jump-after-cma-outlines-merger-findings-2016-05-20)

Sterling: The pound was trading at $1.4605, compared with $1.4618 late Thursday in New York. The pound was moving toward a 1.5% rise for the week.

Recent polls have shown a shift toward a "remain" vote in the Brexit referendum on whether the U.K. should stay in the EU.

"Pollsters have got it wrong in the past, however, if they are on the mark this time round, we may continue to creep higher," said Tobias Davis, U.K. head of corporate treasury sales at Western Union Business Solutions, in a note.

Reports on Friday said attendees at an informal gathering of Group of Seven finance officials and academics in Sendai, Japan, expressed concerns about the impact of the upcoming Brexit vote on financial markets. Britons will vote in the in/out referendum on June 23.

(END) Dow Jones Newswires

May 20, 2016 04:17 ET (08:17 GMT)

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