LONDON MARKETS: FTSE 100 Closes Sharply Higher, Rallying From 14-month Low

By Victor Reklaitis, MarketWatch

U.K. stock benchmark remains down nearly 5% for the month

U.K. stocks closed with gains Monday, rallying alongside a recovery for U.S. stocks. The move higher came after last week's global selloff, which handed the FTSE 100 its lowest close since December 2016.

What are markets doing?

The FTSE 100 gained 1.2% to finish at 7,177.06.

On Friday, the British blue-chip gauge had its lowest close since Dec. 23, 2016, as it notched a weekly drop of 4.7%.

Meanwhile, U.S. stocks were rising (http://www.marketwatch.com/story/us-stock-futures-climb-point-to-rebound-for-monday-2018-02-12) Monday, adding to advances seen at the end of last week.

The pound changed hands at $1.3820, down slightly from $1.3830 late Friday in New York.

What are strategists saying?

"Following the rebound in the U.S. late on Friday and a mixed session in Asia, European indices are pointing to a stronger start to the week," said Jasper Lawler, head of research at London Capital Group, in a note on Monday.

"With commodities rallying across the board and potential for Brexit-induced weakness in the pound, the FTSE could find itself leading the charge in the European bourses."

The FTSE 100 is highly sensitive to the pound's swings, as about 75% of revenue for the index's multinational companies is generated in foreign currencies. It's also a commodities-heavy benchmark, as it features miners and oil companies.

Brent and West Texas Intermediate crude were both up on Monday (http://www.marketwatch.com/story/oil-prices-rebound-after-worst-weekly-loss-in-more-than-a-year-2018-02-12), recovering amid fresh Mideast tensions after the U.S. benchmark logged its worst weekly loss in more than a year.

What is driving the market?

U.K. stocks have slumped this month as part of a wider global market rout. Strategists have pinned the drop in part on the need for a healthy correction after a runup, as well as on rising bond yields amid signs of inflation, with the higher yields luring money out of equities.

See:The Dow's down 10%? It's time for some buying, says longtime bear Doug Kass (http://www.marketwatch.com/story/the-dows-down-10-its-time-for-some-buying-says-longtime-bear-doug-kass-2018-02-09)

And read:A U.K. rate rise in May? Analysts digest hawkish surprise from BOE (http://www.marketwatch.com/story/a-uk-rate-rise-in-may-analysts-digest-hawkish-surprise-from-boe-2018-02-08)

The FTSE 100 is down 4.7% so far in February, and it's showing a drop of 1.1% over the past 12 months.

Which stocks are in focus?

Commodities-related stocks were among the big winners, as oil rallied and metals prices also saw gains (http://www.marketwatch.com/story/gold-rises-despite-equity-rebound-as-dollar-softens-2018-02-12).

Shares in oil giant BP PLC (BP.LN) (BP.LN) tacked on 1.9%, while rival Royal Dutch Shell PLC's stock (RDSB.LN) added 2.4%.

Among miners, Glencore PLC (GLEN.LN) and Anglo American PLC (AAL.LN) gained by 1.6% and 2.4%, respectively. Steel making and mining company Evraz PLC (EVR.LN) jumped 5.8%.

Barclays PLC (BCS) rose by 0.2%, underperforming the FTSE 100 after the bank was hit with a second charge (http://www.marketwatch.com/story/barclays-faces-2nd-criminal-charge-over-qatar-loan-2018-02-12) from British authorities over a loan to Middle Eastern investors.

Pay-TV giant Sky PLC (SKY.LN) added 0.8% after U.S. entertainment heavyweight 21st Century Fox Inc. (FOX)said it would establish an independent editorial board (http://www.marketwatch.com/story/fox-proposes-safeguards-for-sky-news-independence-2018-02-12) and maintain a Sky-branded news services in the U.K. for at least five years to satisfy British regulators concerns over media plurality.

Off the FTSE 100, Acacia Mining PLC shares (ACA.LN) tumbled 3.9% after the company said it swung to a pretax loss in the fourth quarter (http://www.marketwatch.com/story/acacia-mining-swings-to-loss-on-impairment-charges-2018-02-12), hurt by an export ban in Tanzania.

(END) Dow Jones Newswires

February 12, 2018 12:01 ET (17:01 GMT)

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