Thomas Cook surges over 30% after new credit line from banks
By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) — London stocks rose sharply on Monday, in step with Europe and global markets, amid optimism that European officials were increasing efforts to keep the euro-zone debt crisis from worsening.
The FTSE 100 index UK:UKX +2.77% shot up 2.5% to 5,291.62, after suffering a 3.7% fall last week, its worst since the week ending September 23.
A clutch of media reports said European officials have agreed on rules for borrowing against the European Financial Stability Facility and guidelines for intervention in bond markets as well as credit lines for governments. Read Europe agrees on EFSF, seeks deeper union
“The FTSE has held above a close of 5,100 and this seems positive on the short term and we now look for a test of 5,285 to 5,360,” said Atif Latif, director of trading at Guardian Stockbrokers, in emailed comments.
“The market will trade higher on this news as many investors are waiting for any positive sentiment to buy into the rally as they have been sitting in cash on the sidelines and are looking to make gains toward the end of the year,” he said.
Banks and mining stocks, which have typically been the biggest decliners, were rebounding sharply. Shares of heavyweights Barclays PLC BCS +8.83% UK:BARC +7.10% and HSBC Holdings PLC UK:HSBA +4.27% HBC +5.79% rose 6.3% and 3.4% each.
Among other banks, Lloyds Banking Group PLC LYG +7.85% UK:LLOY +4.85% and Royal Bank of Scotland Group PLC RBS +7.65% UK:RBS +4.97% each rose over 6%.
Resource stocks also rebounded sharply amid gains for commodities. December gold futures GC1Z +1.88% rose over $30 to $1,715.40 an ounce, while crude oil for January delivery CL2F +2.52% jumped $3.56 to over $100 a barrel.
Those gains helped miners such as Rio Tinto PLC UK:RIO +4.82% RIO +6.81% and BHP Billiton PLC BHP +6.17% UK:BLT +4.75% , up close to 4% each.
A lone decliner in London was Randgold Resources Ltd. UK:RRS -5.46% , off 5.5% after it said a series of setbacks at its Tongon mine in Côte d’Ivoire will weigh on fourth-quarter production. Randgold cut its output target to 690,000 to 700,000 ounces.
Shares of travel-services firm Thomas Cook Group PLC UK:TCG +20.81% soared 33% after the company said its bankers had agreed to provide a new ÂŁ200 million credit line and relax financial covenants under existing credit lines. The company said it will also cut debt and carry out a strategic review.
Shares in International Consolidated Airlines Group PLC UK:IAG +3.05% bounced 3%.
Barbara Kollmeyer is an editor for MarketWatch in Madrid.
