By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — U.K. stocks rose for a second straight day on Wednesday, as banks advanced on hopes of affordability after a recent sell-off over interest-rate concerns.
The benchmark /zigman2/quotes/210598409/delayed UK:UKX +0.27% rose 1% to close at 6,165.48, adding to a 1.2% gain from Tuesday.
Shares of Aberdeen Asset Management PLC jumped 4.8% after HSBC lifted the investment firm to overweight from neutral.
“Aberdeen’s share price declined by 28% since its peak in May: Uncertainty about the timing of tapering of quantitative easing (QE) in the U.S. and negative newsflow from China triggered a sharp selloff in a number of markets over the past few weeks,” the analysts said.
“However, we believe that market has overreacted on the issue of performance and outflows,” they added.
Banks were also climbing, rising with the broader European banking sector. Shares of Standard Chartered PLC /zigman2/quotes/200125072/delayed UK:STAN +0.51% added 1.5%, Lloyds Banking Group PLC /zigman2/quotes/202285510/delayed UK:LLOY -0.22% /zigman2/quotes/200709414/composite LYG +0.44% rose 2%, HSBC Holdings PLC /zigman2/quotes/203901799/delayed UK:HSBA +1.35% /zigman2/quotes/202687335/delayed HK:5 +1.46% picked up 1.1% and Barclays PLC /zigman2/quotes/208409333/delayed UK:BARC +1.61% /zigman2/quotes/206581728/composite BCS +1.39% gained 2%.
Markets in London also mirrored solid gains seen in Europe and the U.S. where investors picked up stocks recently beaten by worries that the Federal Reserve will taper its asset purchases. Data showing German consumers are optimistic about the summer also helped lift sentiment.
Among other notable movers in London, shares of Legal & General PLC /zigman2/quotes/201125471/delayed UK:LGEN +1.43% climbed 2.1% after the insurance firm said it would buy Lucida PLC, a U.K. annuity buyout firm, for 151 million pounds ($232.9 million).
Shares of Croda International PLC /zigman2/quotes/206442951/delayed UK:CRDA +1.93% picked up 3.1% after UBS lifted the chemicals firm to neutral from sell.
Victrex PLC /zigman2/quotes/202943820/delayed UK:VCT +0.93% got the same treatment from UBS, helping lift the shares 2.1%.
Mining firms, however, curbed the gains for the London benchmark, as most metals prices moved lower.
Shares of Anglo American PLC /zigman2/quotes/201381512/delayed UK:AAL +1.22% shaved off 3.3%, Antofagasta PLC /zigman2/quotes/200173667/delayed UK:ANTO +1.14% dropped 2.1% and BHP Billiton PLC /zigman2/quotes/208108397/composite BHP +3.82% /zigman2/quotes/201448516/delayed AU:BHP +2.46% fell 1%.
Shares of Polymetal International PLC /zigman2/quotes/204469675/delayed UK:POLY +0.65% dropped 5.7%, even as Citigroup lifted the gold miner to neutral from sell.
Shares of Direct Line Insurance Group PLC /zigman2/quotes/201952264/delayed UK:DLG +1.52% climbed 3.8% after the U.K. firm announced plans to cut costs by 130 million pounds ($200 million) and cut about 2,000 jobs.