LONDON MARKETS: FTSE 100 Rises Sharply From 14-month Low

By Victor Reklaitis, MarketWatch

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

U.K. stocks jumped Monday, rallying somewhat 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 1.1% to 7,171.08.

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

Meanwhile, U.S. stock futures 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 $1.3838 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.

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 4.9% so far in February, and it's showing a drop of 1.3% over the past 12 months.

(END) Dow Jones Newswires

February 12, 2018 03:55 ET (08:55 GMT)

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