U.K. Stocks Advance to Five-Week High on Syria Agreement
U.K. stocks advanced to their highest level in more than five weeks as the U.S. and Russia struck a deal for Syria to avoid military action by surrendering its chemical weapons.
EasyJet Plc (EZJ) and International Consolidated Airlines Group SA (IAG) increased more than 2 percent as the price of oil declined on speculation that the threat of imminent military strikes against Syria has eased. Fresnillo Plc (FRES) and Polymetal International Plc, London-listed silver and gold producers, both plunged more than 6 percent.
The FTSE 100 Index (UKX) gained 59.88 points, or 0.9 percent, to 6,643.68 at 9:19 a.m. in London. The equity benchmark climbed 0.6 percent last week amid better-than-expected economic reports from China and as U.S. President Barack Obama delayed a decision on taking military action in Syria. The broader FTSE All-Share Index also advanced 0.9 percent today, while Ireland’s ISEQ Index rose 1.1 percent.
“My feeling with Syria is that it’s now an identifiable, isolated problem which can start and stop with the removal of chemical weapons,” said Henry Dixon, a London-based fund manager at Matterley, a unit of Charles Stanley Group Plc. “That seems to be a palatable outcome to a potentially toxic situation. Any unwinding of the risk premium in the oil price is a positive.”
The volume of shares changing hands in companies listed on the FTSE 100 was 7.2 percent greater than the 30-day average, according to data compiled by Bloomberg.
Russia and the U.S. agreed on Sept. 14 to call for initial inspections of Syria’s chemical weapons by November. They gave President Bashar al-Assad a week to provide an inventory of his arsenal. The United Nations would need to approve any sanctions. The UN will publish its inspection team’s report on the Aug. 21 chemical-weapons attack in Damascus as early as today. The U.S. says the weapons killed more than 1,400 people.
U.S. Secretary of State John Kerry will meet with French President Francois Hollande and foreign ministers from France and the U.K. as he tries to build support for the Syria plan. Kerry may also meet with ministers from Turkey and Saudi Arabia, which have both backed the rebels seeking to overthrow Bashar al-Assad.
Former Treasury Secretary Larry Summers withdrew his nomination as Federal Reserve chairman before a two-day policy meeting starting tomorrow at which the central bank is forecast to reduce its monthly bond purchases. Summers would have tightened Fed policy more than Janet Yellen, who was his main rival to replace Chairman Ben S. Bernanke, according to a Bloomberg Global Poll of investors, analysts and traders last week.
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