FTSE 100 hits two-week high as concerns about banking crisis ease

By Johann M Cherian and Shashwat Chauhan

(Reuters) -British stocks rose in a broad-based rally on Thursday, as risk-on sentiment prevailed due to easing concerns of a global banking meltdown, while power company SSE jumped after lifting its annual outlook.

The FTSE 100 gained 1.5% at close, hitting its highest level in two weeks, while the FTSE 250 midcap index also added 1.5%.

SSE surged 4.1% after the power company lifted its annual earnings expectations.

Market jitters around a banking crisis eased after a U.S. regional bank scooped up assets of failed Silicon Valley Bank this week.

“With every passing day that we’re not having another round of banking turmoil is the day that we go a step closer to people being confident that it was a blip, rather than the start of something terrible,” said Craig Erlam, senior market analyst at Oanda.

British banks extended gained for the fourth straight session, up 0.8%, hitting a one-week high.

Britain launched a long-awaited consultation on reforming rules brought in after the global financial crisis to make top bankers accountable for their decisions.

Britain’s real estate sector finished up 3.3%, posting its best day in two months.

Property firm Warehouse REIT jumped 6.8% after providing a positive operational update.

Heading into the last trading day of the March quarter, London’s FTSE 100 is on track to gain more than 2% for the quarter, though is set to decline for the month as concerns over a global banking meltdown shook global markets.

Optimism around a Chinese recovery has helped commodity prices appreciate, in turn boosting the commodity-linked heavyweights listed in the UK, particularly on the FTSE 100.

Amongst other movers, Petrofac Ltd surged 69.9% after Dutch electricity grid operator TenneT awarded 11 contracts to build systems connecting wind farms in the North Sea to the shore to a consortium led by Hitachi Energy, of which Petrofac is a part.

(Reporting by Johann M Cherian and Shashwat Chauhan in Bengaluru; Editing by Sherry Jacob-Phillips, Krishna Chandra Eluri and Alison WIlliams)