A previous version of this story gave incorrect historic data for the FTSE 100. The story has been corrected.
London’s benchmark for blue-chip stocks pushed higher Wednesday, buoyed largely by shares of oil producers, which rose as crude prices rallied in the wake of the U.S. decision to resume sanctions on Iran.
Meanwhile, shares of Vodafone PLC popped higher on confirmation that the British telecommunications company has agreed a nearly $23 billion deal to buy some European assets from Liberty Global PLC.
How markets are moving
The FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX -2.29% climbed 1.3% to end at 7,662.52, closing at its highest level since Jan. 29, according to FactSet data.
The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.1053% rose to $1.3569 from $1.3546 late Tuesday in New York, as traders looked head to the Bank of England meeting on Thursday.
What’s driving markets
The FTSE 100 was outperforming most of its counterparts in Europe /zigman2/quotes/210599654/delayed XX:SXXP -1.44% as shares of BP PLC and Royal Dutch Shell PLC scaled toward the top of the index. The oil-and-gas sector has a weighting of nearly 17% on the FTSE 100, the second-largest sector after financials, according to FactSet data.
Shares of oil producers rose as U.S. crude and Brent prices jumped almost 3% on Wednesday, bringing West Texas Intermediate above $71 a barrel and to highs not seen in more than three years.
Oil prices, which have been swinging in recent sessions, initially dipped but eventually advanced after U.S. President Donald Trump late Tuesday said he would impose “powerful” new sanctions on Iran as the U.S. withdraws from the Iran nuclear deal.
The reinstatement of Iranian sanctions could result in tighter global oil supplies, because they make it more difficult for Iran to export oil, according to some analysts.
In Brexit news, U.K. Prime Minister Theresa May suffered another blow to her divorce plans after the House of Lords in a vote late on Tuesday backed calls for Britain to remain in the single market after the EU exit.
Will Trump's Iran Bet Pay Off?
After President Donald Trump's big gamble to pull the U.S. out of the Iran nuclear deal, the focus now shifts to Tehran, the Iranian people and America's allies. Gerald F. Seib explains the high stakes. Photo: Getty
What are strategists saying?
“In contrast to yesterday the FTSE 100 has soared today, boosted by the energy firms on expectations that higher oil prices will result from the Iran deal,” said Chris Beauchamp, chief market analyst at IG, in a note.
“It may not be quite as clear-cut as that, at least not in the short term, since oil’s remarkable run has now reached the stage where it is being talked about outside of financial markets. This is usually a sign that the rally has at least peaked for the time being,” he added.
BP PLC /zigman2/quotes/207305210/composite BP -0.52% gained 3.9%, and Royal Dutch Shell PLC /zigman2/quotes/204253697/delayed UK:RDSB -3.04% /zigman2/quotes/207682964/composite RDS.B -1.52% bulked up 3.4% as oil prices jumped.
Imperial Brands PLC /zigman2/quotes/208789104/delayed UK:IMB -2.53% /zigman2/quotes/206232937/delayed IMBBY -1.00% jumped 6.2% to the top of the FTSE 100 after the tobacco company laid out plans to sell assets to raise around 2 billion pounds ($2.7 billion) in the next year or two.
Burberry Group PLC shares /zigman2/quotes/205386705/delayed UK:BRBY -5.56% /zigman2/quotes/203108786/delayed BURBY -5.12% tumbled 6.1% after Belgian holding company Groupe Bruxelles Lambert /zigman2/quotes/206932604/delayed BE:GBLB -1.30% said it has sold a 6.6% stake in the British luxury goods maker.
Vodafone /zigman2/quotes/202484985/delayed UK:VOD -0.83% /zigman2/quotes/202862751/composite VOD +0.06% ended 0.6% higher after the company agreed to buy operations in Germany, Hungary, Romania and the Czech Republic from Denver-based cable giant Liberty Global PLC /zigman2/quotes/205000522/composite LBTYA +0.57% . The deal, valued at €19 billion ($23 billion), doesn’t include Liberty businesses in the U.K. and Ireland, which compete with Vodafone’s.
Compass Group PLC /zigman2/quotes/200043088/delayed UK:CPG -7.46% dropped 4.8% as the food services company posted a fall in first-half 2018 pretax profit to £792 million ($1.07 billion), which is said was partly due to foreign exchange effects.