Article Highlights

  • FTSE 100 up 0.6 percent
  • Sterling retreats after Brexit deal gains
  • Fed rate hike expected on Wednesday
  • BAE rises after Qatar Typhoon deal
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A weaker pound, buoyant overnight Asian shares and growing confidence in the financial sector helped pushed British shares higher and slightly ahead of their European peers on Monday.

The blue-chip FTSE 100 was up 0.6 percent by 0906 gmt while Paris and Frankfurt were both up 0.1 percent after strong U.S. job growth had helped Wall Street close higher on Friday.

“GBP (sterling) has given up the gains made on Friday morning,” after the announcement of a deal between the European Commission and Britain on Brexit divorce terms, Rabobank said in a note.

A lower pound generally support the FTSE as the weaker currency translates into an accounting boost for large firms with overseas revenues.

Financials added the most points to the index as the Federal Reserve’s widely expected rate hike on Wednesday and a deal last week on banking rules fueled positive sentiment.

HSBC rose 1.8 percent, Standard Chartered 1.7 percent and Lloyds 0.6 percent.

Anglo-South African investment bank and asset manager Investec was up 2.5 percent after it said its credit exposure to troubled South African retailer Steinhoff represented only a small portion of its balance sheet.

Babcock’s shares were up 1.9 percent, the best performance on the index after it said no changes were required in preparation for the adoption of the latest financial reporting rules.

BAE Systems added 1.1 percent after Qatar agreed to a $6.7 bln Typhoon combat jets deal.

Unilever added 0.3 percent after reports Apollo Global Management, U.S. agricultural trader Archer Daniels Midland ADM.N and former chief executive of Germany’s Grohe, David Haines, were preparing to submit a new bid in a $7 billion auction for its spreads business.

British sausage-skin maker Devro was down 0.3 percent after its Chief Executive Peter Page agreed to step down after the company’s annual results in February.

The London Stock Exchange Group also shed 0.3 percent as reports said it has begun interviewing candidates for a new chief executive, in what can be seen as a sign its board is confident it fend off an activist investor’s attempt to oust the chairman.