U.K. Stocks Rise for Six-Week High After Syria AgreementSofia Horta e Costa
U.K. stocks advanced, with the FTSE 100 Index closing at its highest level in more than six weeks, as the U.S. and Russia agreed on a deal for Syria to avoid military action by surrendering its chemical weapons.
EasyJet Plc and International Consolidated Airlines Group SA 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 and Polymetal International Plc both plunged more than 7 percent after the commodity producers were not included in the NYSE Arca Gold Miners Index.
The FTSE 100 gained 39.06 points, or 0.6 percent, to 6,622.86 at the close of trading 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 whether to bomb Syria. The broader FTSE All-Share Index also advanced 0.6 percent today, while Ireland’s ISEQ Index rose 1.5 percent to a five-year high.
“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 U.S. and Russia agreed on Sept. 14 to demand inspections of Syria’s chemical-weapon facilities and stockpiles by November. They gave President Bashar al-Assad a week to provide an inventory of his arsenal. The United Nations received its inspection team’s report on the Aug. 21 chemical-weapon attacks near Damascus, which the U.S. says killed more than 1,400 people.
U.S. Secretary of State John Kerry met with French President Francois Hollande and foreign ministers from France and the U.K. today to push for a UN resolution ratifying the plan to remove Syria’s chemical weapons.
EasyJet climbed 2.4 percent to 1,331 pence, while IAG, which owns British Airways, added 3.3 percent to 325 pence. West Texas Intermediate crude futures fell as much as 2 percent today, following their largest weekly decline since July. Oil rose to a two-year high on Aug. 28 amid concern that a U.S.-led strike would worsen Syria’s civil war.
Former Treasury Secretary Lawrence Summers withdrew from the contest to become the Federal Reserve’s next 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 policy more quickly than his rival Janet Yellen, according to a Bloomberg Global Poll of investors, analysts and traders last week.
Barclays Plc gained 1.3 percent to 305.4 pence as Nomura Holdings Inc. raised its rating on the stock to buy from reduce. The brokerage said revenue will benefit from accelerating economic growth in developed markets, outweighing concern about new regulations and demands for capital.
AstraZeneca Plc gained 1.7 percent to 3,229 pence in London trading as Nordea Bank AB upgraded the drugmaker to buy from sell, saying investors underestimate the potential of the company’s upcoming drugs. The shares have advanced 11 percent so far this year, while the Stoxx 600 Health Care Index has rallied 14 percent.
Optimal Payments Plc jumped 12 percent to 256 pence, its highest price since Sept. 2006, after the online money-transfer company posted first-half profit before tax of $15.5 million, compared with $1.7 million in the same period last year.
Fresnillo tumbled 13 percent to 1,045 pence, while Polymetal slid 7.1 percent to 659.5 pence. Hochschild Mining Plc, which operates mines in Peru, Mexico and Argentina, slumped 14 percent to 237.4 pence, its biggest plunge since October 2008. NYSE Euronext failed to include any of the three stocks in its index as it added companies listed outside the U.S. for the first time, according to a statement.
Centamin Plc, the only U.K.-listed company to join the NYSE Arca Gold Miners Index, rose 2.4 percent to 45.6 pence.