By Carla Mozee, MarketWatch
Marks & Spencer gains ground after upgrade
LONDON (MarketWatch)--U.K. stocks jumped by the most in two
months Tuesday, with energy shares riding oil prices higher as
investors also returned from a holiday break to improving domestic
data and fading fears of a U.S. interest-rate hike.
The FTSE 100 rose 1.9% to 6,961.77, with all sectors ending
higher, including a 4% gain for the heavily weighted oil and gas
group. Oil producer BG Group PLC was the best performing on the
benchmark with a 6.7% gain, while Royal Dutch Shell PLC (RDSB)
tacked on 3.9%.
Oil stocks were catching up with Monday's 6% surge in oil
futures
(http://www.marketwatch.com/story/oil-rebounds-as-iran-exports-seen-taking-months-to-ramp-up-2015-04-06)(CLK5),
which came on easing concerns that Iran's preliminary deal on its
nuclear program would soon unleash a flood of Iranian oil into
markets. Oil futures turned higher during Tuesday's session
(http://www.marketwatch.com/story/oil-eases-with-us-stockpiles-production-back-in-focus-2015-04-07)
(http://www.marketwatch.com/story/oil-eases-with-us-stockpiles-production-back-in-focus-2015-04-07)
(http://www.marketwatch.com/story/oil-eases-with-us-stockpiles-production-back-in-focus-2015-04-07).
"There is unlikely to be much additional Iranian oil hitting the
market this year, even if a full deal is signed in June," wrote
commodities economist Thomas Pugh at Capital Economics, in a note.
"Once sanctions have been lifted there could well be a surge in
exports in the first few months as Iran sells its stores of oil,
but ramping production up to previous levels is likely to take
appreciably longer."
Mining heavyweight Rio Tinto PLC (RIO) was also among Tuesday's
top advancers, rising 4%. The Wall Street Journal reported that a
six-month moratorium
(http://www.wsj.com/articles/metals-divergence-could-reignite-glencores-interest-in-rio-1428260142)
on Glencore PLC offering another takeover bid for Rio expires
Tuesday. Glencore shares ended 3.5% higher.
Marks & Spencer Group PLC finished up 1.3% after the
retailer's rating at Société Générale was upgraded to buy from
hold.
U.K. equity investors returned to the market after the Easter
break, which closed trading on Friday and Monday. U.S. stocks
surged
(http://www.marketwatch.com/story/us-stocks-futures-tumble-after-jobs-data-triggers-corporate-profit-worries-2015-04-06)(SPX)
(DJI) on Monday buoyed by bets that the disappointing March jobs
report
(http://www.marketwatch.com/story/us-jobs-growth-in-march-slumps-to-15-month-low-2015-04-03)
will prompt the Federal Reserve to move more slowly on raising
interest rates than had been anticipated. U.S. stocks extended
gains on Tuesday.
Back in London, shares of only three companies ended lower.
Direct Line Insurance Group PLC lost 0.3%, and Burberry Group PLC
shed 0.1%.
International Consolidated Airlines Group fell 1.2% after J.P.
Morgan Cazenove, in a note about the European airlines industry,
downgraded the British Airways parent company to overweight from
neutral. EasyJet PLC's rating was held at overweight, and the
budget carrier's shares turned higher by 0.1%.
Services PMI: On the economic front, data firm Markit said its
March U.K. services-sector activity index rose to 58.9. That was up
from 56.7 in February and higher than a FactSet consensus forecast
of 57.0. March's reading was the highest since August, driven by
growth in new business.
"While the data support the view that the next move interest
rates will be upward, the lack of inflationary pressures suggests
the first hike remains some way off, and probably not this year
unless we see some significant upturn in wage growth," said Chris
Williamson, chief economist at Markit, in a statement.
The pound (GBPUSD) traded at $1.4854 versus around $1.4909 ahead
of the data. Sterling late Monday in New York had changed hands at
$1.4482.
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