LONDON MARKETS: FTSE 100 Leaps, Propelled By Progress On U.S. Tax Cuts

By Carla Mozee, MarketWatch Features Dow Jones Newswires

Blue-chip stocks in London climb 0.8%, most in nearly a week

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U.K. blue-chip stocks climbed by the most in nearly a week Monday, with bank shares taking part in a broad-based rally seen as being set off by the passage of a tax overhaul package in the U.S. Senate.

What markets are doing: The FTSE 100 index jumped 0.8% to 7,360.84, with industrial and financial shares leading all sectors higher. The index on Friday fell 0.4% (http://www.marketwatch.com/story/ftse-100-lower-as-bank-stocks-come-under-pressure-2017-12-01), taking last week's loss to 1.5%.

The pound traded at $1.3444, up from $1.3478 late Friday in New York. Against the euro, sterling bought EUR1.1330, on par with Friday's trade.

What's moving markets: U.K. and European stocks started the week in rally mode, taking their cue from gains in U.S. equity futures after the U.S. Senate passed the Republican-sponsored tax reform proposal almost entirely along party lines (http://www.marketwatch.com/story/senate-passes-tax-bill-advancing-top-republican-priority-2017-12-02). Only Democrats and Tennessee Republican Bob Corker voted against it.

Read:Trump celebrates tax-bill victory as opponents vent their fury via #TaxScamBill (http://www.marketwatch.com/story/trump-celebrates-tax-bill-victory-as-opponents-vent-their-fury-via-taxscambill-2017-12-02)

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The Senate move increases chances that proposed tax changes will signed into law by President Donald Trump, which would fulfill long-running anticipation in markets over the past year that the Trump administration would usher in what Republicans have touted as business-friendly tax changes. The House and Senate now must agree on a single tax bill before it can be sent to Trump to sign.

Meanwhile, there are reports Monday that there has been progress in Brexit talks over the weekend. U.K. Prime Minister Theresa May was scheduled to meet with European Commission President Jean-Claude Juncker in Brussels on Monday. But the issue of the Irish border has still to be settled, and that is seen as key before the meeting between the two leaders.

Stock movers: Bank shares worldwide have been pushed higher throughout the past year on expectations of lower taxes in the U.S. Many overseas banks have businesses interest in the U.S.

In London, shares of Barclays PLC (BCS) (BCS) popped up 2.1%, HSBC Holdings PLC (HSBA.LN) (HSBA.LN) rose 1.2%, Royal Bank of Scotland Group PLC (RBS.LN) (RBS.LN) put o 0.9% and Standard Chartered PLC (STAN.LN) picked up 1%. Lloyds Banking Group PLC (LLOY.LN)(LLOY.LN) was up a more modest 0.4%.

(END) Dow Jones Newswires

December 04, 2017 04:03 ET (09:03 GMT)