By Carla Mozee and Sara Sjolin, MarketWatch

U.K. stocks rose on Tuesday as an advance in oil shares pushed the blue-chips index to a sixth consecutive advance and helped it outperform the broader European equity market.

A rally for Shire shares after a fifth takeover proposal from Takeda also helped lift U.K. stocks.

How markets are performing

The FTSE 100 index rose 0.4% to end at 7,425.40, closing above the 7,400 level for the first time since early February.

The pound bought $1.3970, recovering from an intraday low of $1.3918, and rising from $1.3939 late Monday in New York.

Read: Stock investors are freaking out about bonds ending a bull run--but should they be? (http://www.marketwatch.com/story/the-stock-market-is-freaking-out-up-about-the-bond-marketbut-should-it-be-2018-04-21)

Also:Here's why the pound got whipped this week--and why it may bounce back to $1.44 (http://www.marketwatch.com/story/heres-why-the-pound-got-whipped-this-week-and-why-it-may-bounce-back-to-144-2018-04-20)

What's driving the market

Oil companies were among the best performers, riding on the back of higher oil prices. The moves came as Brent crude prices traded above $75 a barrel (http://www.marketwatch.com/story/brent-oil-breaks-above-75-on-fears-iran-sanctions-are-looming-2018-04-24), the highest since 2014, as tensions between Saudi Arabia and Yemen heated up. Also, speculation that U.S. sanctions on Iran will be put back in place in May helped push up Brent and oil prices .

The rally for oil stocks also helped offset weakness from news that U.S. 10-year yields jumped to the psychologically important 3% (http://www.marketwatch.com/story/yields-pull-back-as-us-10-year-government-bond-march-to-3-stalls-2018-04-24). Higher yields typically weigh on stocks as bonds start to offer better returns than equities and push up borrowing costs for companies.

The moves in the U.S. knocked European stocks lower (http://www.marketwatch.com/story/european-stocks-hold-at-2-month-highs-as-energy-names-rally-2018-04-24), with the Stoxx European 600 index ending down 0.02% after trading at a more than two-months high earlier in the session.

What are strategists saying?

"It is this move higher in crude oil prices, along with the rise in demand, that is helping fuel the recent rise in yields as well as the positive tone for equity markets, however if it continues too far we could start to see it act as a drag on equity markets, if prices along with yields start to move even higher," said Michael Hewson, chief market analyst at CMC Markets, in a note.

Share movers

Shire PLC shares (SHPG) (SHPG) jumped 3.4% after Japanese drugmaker Takeda Pharmaceutical Co. (4502.TO) made a fifth takeover proposal for its U.K. rival (http://www.marketwatch.com/story/takeda-makes-fifth-takeover-bid-for-shire-2018-04-24-104853948). None of the companies disclosed the financial terms of the proposal, but the value of the rare-drug specialist is expected to be abpt more than $60 billion.

Shares of oil producers BP PLC (BP.LN) (BP.LN) tacked on 2.3% and Royal Dutch Shell PLC (RDSA.LN) (RDSA.LN) rose 1.2% as oil prices moved up.

London Stock Exchange Group PLC shares (LSE.LN) rose 2% as the exchange operator said first-quarter gross profit rose 13% (http://www.marketwatch.com/story/london-stock-exchange-profit-rises-2018-04-24) after generating double-digit income growth for all its core business units.

William Hill PLC shares (WMH.LN) tumbled 13% on the midcap FTSE 250 (WMH.LN) after a report by The Times newspaper (https://www.thetimes.co.uk/article/hammond-accepts-2-limit-for-addictive-gambling-machines-wvqhcln95) that the U.K. government is set to reduce the maximum bet to GBP2 for fixed odds betting terminals.

 

(END) Dow Jones Newswires

April 24, 2018 12:16 ET (16:16 GMT)

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