London Markets: U.K. stocks rally; resource firms cheer Fed action

By Sara Sjolin, MarketWatch

LONDON (MarketWatch)?British stocks jumped Friday, with resources and banks in the lead, after the Federal Reserve pulled the trigger on a third round of quantitative easing to underpin the U.S. economic recovery.

The FTSE 100 index /quotes/zigman/3173262 UK:UKX +1.64% ?rallied 1.6% to close at 5,915.55, ending the week 2.1% higher.

Fed says it will buy more bonds

The Federal Reserve says it will launch a major new round of large-scale bond buying, this time on an open-ended basis.

Mining firms posted the biggest gains in the index, as metals prices mostly climbed.

Shares of Kazakhmys PLC /quotes/zigman/391399 UK:KAZ +13.68% ?surged 14%, Eurasian Natural Resources Corp. /quotes/zigman/492222 UK:ENRC +10.90% ??jumped 11% and sector heavyweight Rio Tinto PLC /quotes/zigman/155899 UK:RIO +6.59% /quotes/zigman/182541/quotes/nls/rio RIO +3.73% ? /quotes/zigman/176317 AU:RIO +2.78% ?added 6.6%.

The gains came as the Federal Open Market Committee said Thursday it would purchase $40 billion of mortgage-backed securities every month until the U.S. labor market improves. The central bank also said it intends to keep the federal funds rate near zero through at least the middle of 2015. See: Fed to launch QE3 by buying mortgage securities.

The Bank of England stood pat on interest rates and asset purchases recently.

Analysts at UBS said in a note that the new round of stimulus measures would ?clearly be bullish for miners? and that copper and iron ore would be ?well positioned due to lower volumes.? They further pointed to Rio Tinto, Kazakhmys and Eurasian Natural Resources as their preferred U.K. mining plays.

Banks also cheered the move to undertake further quantitative easing in the largest global economy.

Shares of Barclays PLC /quotes/zigman/301787 UK:BARC +5.09% ? /quotes/zigman/152323/quotes/nls/bcs BCS +3.21% ?rose 5.1%, Royal Bank of Scotland Group PLC /quotes/zigman/10330253 UK:RBS +1.86% ? /quotes/zigman/530544/quotes/nls/rbs RBS -0.44% ?added 1.9% and HSBC Holdings PLC /quotes/zigman/13843 UK:HSBA +2.87% ? /quotes/zigman/207333/quotes/nls/hbc HBC +1.96% ? /quotes/zigman/13834 HK:5 +2.90% ?gained 2.9%.

/quotes/zigman/3173262 UKX 5,915.55, +95.63, +1.64%

Oil firms further supported the London index, as crude-oil prices climbed closer to $100 a barrel in New York.

Shares of BP PLC /quotes/zigman/210014 UK:BP +1.20% ? /quotes/zigman/247026/quotes/nls/bp BP +0.55% ?took on 1.2% and Royal Dutch Shell PLC /quotes/zigman/359955 UK:RDSB +0.43% ? /quotes/zigman/379012/quotes/nls/rds.b RDS.B -0.74% ?picked up 0.4%, while BG Group PLC /quotes/zigman/249967 UK:BG +3.01% ?added 3%.

Also higher, investment firm Schroders PLC /quotes/zigman/257601 UK:SDR +3.55% ?advanced 3.6% after Standard & Poor?s Equity Research upgraded its rating to hold from sell.

?We expect rallying equity markets to help boost assets under management, thereby helping to raise fee income over the coming quarters,? said Frank Braden, analyst at S&P, in a note.

However, shares of Intertek Group PLC /quotes/zigman/305986 UK:ITRK -0.40% ?dropped 0.4%. HSBC cut the testing and certification provider to a neutral rating from overweight.

British Sky Broadcasting Group PLC /quotes/zigman/143786 UK:BSY -3.23% ?fell 3.2%.

/quotes/zigman/3173262

UK : FTSE Indices

Volume: 0.00

Sept. 14, 2012 4:35p

/quotes/zigman/391399

UK : U.K.: London

Volume: 8.48M

Sept. 14, 2012 4:35p

Rev. per Employee

?34,758

/quotes/zigman/492222

UK : U.K.: London

Volume: 9.35M

Sept. 14, 2012 4:35p

Rev. per Employee

?56,579

/quotes/zigman/155899

UK : U.K.: London

3,281.50 p

+203.00 +6.59%

Volume: 14.31M

Sept. 14, 2012 4:35p

Market Cap

?43.44 billion

Rev. per Employee

?527,959

/quotes/zigman/182541/quotes/nls/rio

US : U.S.: NYSE

Volume: 5.60M

Sept. 14, 2012 4:01p

Rev. per Employee

$836,487

/quotes/zigman/176317

AU : Australia: Sydney

Volume: 4.12M

Sept. 14, 2012 4:40p

Rev. per Employee

$821,334

/quotes/zigman/301787

UK : U.K.: London

Volume: 171.65M

Sept. 14, 2012 4:35p

Market Cap

?26.67 billion

Rev. per Employee

?285,159

/quotes/zigman/152323/quotes/nls/bcs

US : U.S.: NYSE

Volume: 9.56M

Sept. 14, 2012 4:02p

Rev. per Employee

$487,429

/quotes/zigman/10330253

UK : U.K.: London

Volume: 34.16M

Sept. 14, 2012 4:35p

Market Cap

?30.45 billion

Rev. per Employee

?254,327

/quotes/zigman/530544/quotes/nls/rbs

US : U.S.: NYSE

Volume: 692,544

Sept. 14, 2012 4:06p

Rev. per Employee

$423,098

/quotes/zigman/13843

UK : U.K.: London

Volume: 43.33M

Sept. 14, 2012 4:35p

Market Cap

?104.32 billion

Rev. per Employee

?231,061

/quotes/zigman/207333/quotes/nls/hbc

US : U.S.: NYSE

Volume: 1.94M

Sept. 14, 2012 4:01p

Market Cap

$168.14 billion

Rev. per Employee

$369,480

/quotes/zigman/13834

HK : Hong Kong

Volume: 37.12M

Sept. 14, 2012 4:01p

Market Cap

HK$1303.81 billion

Rev. per Employee

HK$2.84M

/quotes/zigman/210014

UK : U.K.: London

Volume: 48.87M

Sept. 14, 2012 4:35p

Market Cap

?84.69 billion

/quotes/zigman/247026/quotes/nls/bp

US : U.S.: NYSE

Volume: 8.21M

Sept. 14, 2012 4:00p

Market Cap

$136.49 billion

/quotes/zigman/359955

UK : U.K.: London

Volume: 4.14M

Sept. 14, 2012 4:35p

Market Cap

?144.69 billion

/quotes/zigman/379012/quotes/nls/rds.b

US : U.S.: NYSE

Volume: 911,493

Sept. 14, 2012 4:06p

Market Cap

$233.20 billion

/quotes/zigman/249967

UK : U.K.: London

Volume: 14.13M

Sept. 14, 2012 4:35p

Market Cap

?42.95 billion

/quotes/zigman/257601

UK : U.K.: London

Volume: 1.31M

Sept. 14, 2012 4:35p

Rev. per Employee

?512,254

/quotes/zigman/305986

UK : U.K.: London

Volume: 496,998

Sept. 14, 2012 4:35p

Rev. per Employee

?62,352

/quotes/zigman/143786

UK : U.K.: London

Volume: 8.87M

Sept. 14, 2012 4:35p

Market Cap

?12.35 billion

Rev. per Employee

?424,278

Sara Sjolin is a MarketWatch reporter, based in London.

Source: http://www.marketwatch.com/news/story.asp?guid=%7B91836DDA-FE3E-11E1-BAF9-002128049AD6%7D&siteid=rss

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