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U.K. stocks rise; Glencore off on M&A uncertainty

6/27/12 12:16 PM ET (MarketWatch)

LONDON (MarketWatch) -- Oil and bank shares pushed the leading U.K. benchmark into positive territory Wednesday, after trading in the red for four straight sessions, though unexpected merger problems at Glencore International PLC put some pressure on the market.

The FTSE 100 index (UKX) , down 3.1% over the previous four trading days, rallied 1.4% to 5,523.92.

Energy shares led the charge higher, after oil prices extended gains on the back of upbeat U.S. housing data late in the session. Pending home sales for May climbed to the highest level in two years, according to the National Association of Realtors. Pending home sales climb to two-year high in May, surging 5.9%.

BG Group PLC(BG.) rallied 3.8%, while BP PLC(BP.) (BP) added 1.7% and Royal Dutch Shell PLC(RDSA) (RDS.A) (RDSB) (RDS.B) gained 1.4%.

Banks, having been among the main sectors driving markets lower earlier in the week, traded higher. Shares of Lloyds Banking Group PLC(LLOY) (LYG) gained 3.5% as heavyweight HSBC Holdings PLC(HSBA) (HBC) picked up 2.4%.

Barclays PLC(BARC) (BCS) added 1.9% as the bank got hit with fines and penalties by regulators in the U.S. and the U.K. Barclays fined $452 million in interest-rate probe

Royal Bank of Scotland Group PLC(RBS) (RBS) also rose, up 2.4%, partly recovering from an investor flight in recent days following a glitch that caused account disruptions for millions of customers.

Bucking the trend, shares of Glencore (GLEN) dropped 1.5%. Qatar Holding, the sovereign-wealth fund that owns a substantial stake in miner Xstrata PLC(XTA) , put up an unexpected obstacle in the path of the companies' planned merger, pushing for better terms. Shares of Xstrata were off 1.2%.

On Wednesday, Glencore said Xstrata's board of directors had proposed tweaking the conditions of the retention package linked to the merger. Shares of Xstrata added 1.4%. See: Qatar calls on Glencore to sweeten Xstrata offer.

Among other notable movers in London, AstraZeneca PLC(AZN) (AZN) advanced 1.5%. U.S. drug maker Merck & Co. (MRK) said its partnership with AstraZeneca will remain in place for at least two more years, under amended terms. See: Merck-AstraZeneca venture intact for two more years.