Britain's index of leading shares closed 0.8 percent higher on Monday, recouping some of last week's losses, as heavyweight energy stocks tracked crude prices higher and defensive drugmakers gained. The FTSE 100 gained 46.4 points to 5,667.2, having fallen 1.5 percent on Friday. The commodity-heavy index easily outperformed peers in Germany and France.
Crude oil prices were up $1.46 to $136.82, edging towards their record near $140 a barrel as tension between Iran and Israel countered the impact of Saudi Arabia's pledge to pump more oil, and a vow by Nigerian militants to halt attacks.
Royal Dutch Shell rose 1.5 percent, BP gained 1.8 percent and Centrica jumped 2.4 percent. The energy-related gains came as a respite to the FTSE after it fell 3 percent last week. The benchmark is still down over 12 percent this year and investors remain braced for more wobbles.
"It's certainly going to be another volatile week," said Keith Bowman, equity analyst at Hargreaves Lansdown. "I still think there is a lot of nervousness and caution around. Investors are waiting to see whether we are going to see another lurch downwards on the back of the credit crunch difficulties."
A rare loser in the energy sector was FTSE 250-listed Expro , down 2.7 percent after US oil services firm Halliburton said it had ended talks to buy its UK rival after Expro refused to open an auction and opted for a 1.8 billion pound ($3.5 billion) rival bid.
Miners, the other half of the commodities combination that has helped the FTSE this year, were broadly higher. Eurasian gained 2.1 percent, Anglo American rose 0.4 percent and BHP Billiton gained 1.1 percent.
Xstrata gained 2 percent after it said on Sunday it would match a rival bid for Australian listed miner Indophil Resources Ltd as competition for a giant undeveloped copper mine in the Philippines heated up. Pharmaceuticals companies performed strongly with Shire soaring nearly 6 percent after Goldman Sachs raised its rating on the stock to "buy" from neutral and added it to its pan-European "conviction buy" list. AstraZeneca gained 3.1 percent and GlaxoSmithKline rose 2 percent.
Property firms were the biggest losers after a survey by property website Rightmove showed that asking prices for homes in England and Wales were 0.1 percent higher on a year ago in June, with the rate of annual price growth cooling from 2.2 percent in May.
Land Securities Group was the biggest loser in the FTSE 100, down 4.8 percent, while British Land was down 2.7 percent. Liberty International, Britain's top shopping mall owner, fell 2.8 percent after HSBC cut its price target. Shares in HBOS fell 4.3 percent to below the 275 pence rights issue price as the threat that a big chunk of the shares will not be taken up during the fundraising adds to mounting concerns about UK economic prospects.
Lloyds TSB fell 2.7 percent after people familiar with the situation said it would consider a significant acquisition and is looking at a possible deal in Germany. Barclays shares were also on the back foot, down 2.8 percent after the Sunday Times said claims by a senior member of the Qatari royal family over an alleged 50 million euro fraud at Barclays could flare up again just as the bank seeks to raise funds from Qatar.. Barclays declined to comment.
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