U.K. Stocks Jump From Two-Week Low as IAG, Imperial Tobacco Gain

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U.K. stocks rebounded, rallying the most in almost three weeks.

Imperial Tobacco Group Plc climbed 3.3 percent after agreeing to buy Reynolds American Inc.’s Winston, Kool, Salem and Maverick. Aer Lingus Group Plc gained 1.9 percent after IAG SA won backing from the Irish government to proceed with its takeover. Shares of British Airways’ parent rose 3.2 percent. CRH Plc advanced 3.6 percent, the most in the FTSE 100 Index.

The FTSE 100 gained 1.2 percent to 7,033.33 at the close of trading in London, erasing its Tuesday losses. The broader FTSE All-Share Index advanced 1.1 percent, while Ireland’s ISEQ Index added 1.5 percent.

Amid stocks that dropped, Plus500 Ltd. lost 4.7 percent, reversing a jump of as much as 11 percent, after the trading firm said there was no evidence it will be fined amid regulatory probes. Glencore Plc fell 1 percent.

Queen Elizabeth II spoke on Wednesday, setting out the government’s agenda for the coming year. Prime Minister David Cameron gave priority to legislation for a referendum on leaving the European Union.